TITLE 35. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

CHAPTER 2. NONPROFIT CORPORATIONS

Part 14. Distributions

Prohibited Distributions -- Permitted Transactions

35-2-1401. Prohibited distributions -- permitted transactions. (1) Except as authorized by 35-2-1402, a corporation may not make any distributions.

(2) A public benefit corporation may, subject to the requirements of Title 15, chapter 31, and this chapter, as applicable:

(a) pay reasonable compensation or reimburse reasonable expenses to members, directors, or officers for services rendered; and

(b) confer benefits upon or make contributions to members in conformity with its charitable purposes if after the transaction is completed:

(i) the corporation would be able to pay its debts as they become due in the usual course of its activities; and

(ii) the corporation's total assets would at least equal the sum of its total liabilities.

History: En. Sec. 132, Ch. 411, L. 1991; amd. Sec. 1, Ch. 135, L. 2007.