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This entry was published on 2015-12-18
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Dividends prohibited; certain distributions of cash or property authorized
Not-for-Profit Corporation (NPC) CHAPTER 35, ARTICLE 5
§ 515. Dividends prohibited; certain distributions of cash or property


(a) A corporation shall not pay dividends or distribute any part of
its income or profit to its members, directors, or officers.

(b) A corporation may pay compensation in a reasonable amount to
members, directors, or officers, for services rendered, and may make
distributions of cash or property to members upon dissolution or final
liquidation as permitted by this chapter. No person who may benefit from
such compensation may be present at or otherwise participate in any
board or committee deliberation or vote concerning such person's
compensation; provided that nothing in this section shall prohibit the
board or authorized committee from requesting that a person who may
benefit from such compensation present information as background or
answer questions at a committee or board meeting prior to the
commencement of deliberations or voting relating thereto. Nothing in
this section or in paragraph (h) of section seven hundred fifteen of
this chapter shall be construed to prohibit a director from deliberating
or voting concerning compensation for service on the board that is to be
made available or provided to all directors of the corporation on the
same or substantially similar terms.

(c) A corporation may confer benefits upon members or nonmembers in
conformity with its purposes, may redeem its capital certificates or
subvention certificates, and may make other distributions of cash or
property to its members or former members, directors, or officers prior
to dissolution or final liquidation, as authorized by this article,
except when the corporation is currently insolvent or would thereby be
made insolvent or rendered unable to carry on its corporate purposes, or
when the fair value of the corporation's assets remaining after such
conferring of benefits, or redemption, or other distribution would be
insufficient to meet its liabilities.