16-6a-1302. Authorized distributions

(1) A nonprofit corporation may:
      (a) make distributions or distribute the nonprofit corporation's assets to a:
            (i) member that is a domestic or foreign nonprofit corporation;
            (ii) member of a mutual benefit corporation, not inconsistent with its bylaws;
            (iii) shareholder of a water company in a manner consistent with its articles of incorporation, bylaws, and the provisions of this chapter; or 
            (iv) governmental entity;
      (b) pay compensation in a reasonable amount to its members, directors, or officers for services rendered;
      (c) if a cooperative nonprofit corporation, make distributions consistent with its purposes; and
      (d) confer benefits upon its members in conformity with its purposes.

(2) A nonprofit corporation may make distributions upon dissolution as follows:
      (a) to a member that is a domestic or foreign nonprofit corporation;
      (b) to its members if it is a mutual benefit corporation;
      (c) to a shareholder of a water company in proportion to the shareholder's interest in the water company, consistent with the water company's articles of incorporation and bylaws;
      (d) to another nonprofit corporation, including a nonprofit corporation organized to receive the assets of and function in place of the dissolved nonprofit corporation; and 
      (e)  otherwise in conformity with Part 14, Dissolution.

(3) Authorized distributions by a dissolved nonprofit corporation may be made by authorized officers or directors, including those elected, hired, or otherwise selected after dissolution if the election, hiring, or other selection after dissolution is not inconsistent with the articles of incorporation and bylaws existing at the time of dissolution.

Amended 2009, ch. 386; 2015, ch. 240, eff. May 12, 2015; 2017, ch. 358, eff. May 9, 2017.

Print   Email

Questions and Answers

Have questions about a statute? Ask it and an experienced Utah HOA attorney will answer it, plus see all the previous questions and answers.

Only members may post and view questions and answers. Join us by subscribing today!

Key Concepts explained

The index is the main hub of the site, where key concepts are explained

The 6 resolutions & 5 forms every HOA should have

Procedures required by law, updated as the laws change yearly, so your HOA is always in compliance. Plus other policy resolutions
*Prudent-Legal plan only

Step-by-Step Guides

Guides to walk board through owner requests for: records, assistance animal (disability), satellite dish, solar device. Avoid violating federal and Utah law!
Guides to walk a homeowner through making request for records and to keep an assistance animal for a person with a disability.

2 Hours Attorney Time

Counsel from a Utah HOA specialist attorney
*Prudent-Legal plan only

Q & A

Have questions about a statute? Ask it and an experienced HOA attorney will answer it. Plus, see all the other Q & A.

Legal Updates

Stay informed! Get updates of new HOA laws with explanations of how they affect your community and what to do to comply and minimize risk.

Tools to help you understand the law

Key words defined in hovercards, powerful search, comments, footnotes, tags, explanations and case law summaries

Plus more!