§ 14-3-1302 — Exceptions to prohibition against distributions

Georgia § 14-3-1302

• Jurisdiction: Georgia
• Title: 14

Text

(a) Payments to any of the following are not unlawful distributions: (1) Organizations whether or not incorporated that are organized and operated for the same or similar purposes as the distributing corporation; (2) Organizations whether or not incorporated that are organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder, member, or individual; or (3) A state or possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia. (b) Except for charitable corporations, a corporation may repurchase a membership for the consideration that the member paid for his or her membership or return a portion of a membership fee to a withdrawing member if, after the purchase or return is completed: (1) The corporation would be able to pay its debts as they become due in the normal course of business; and (2) The corporation's total assets would at least equal the sum of its liabilities. (c) Payments of indemnification or reasonable compensation, fees, or expenses incurred in the performance of duties on behalf of the corporation are not unlawful distributions.

Legislative History

Amended by 2023 Ga. Laws 260,§ 1-1, eff. 7/1/2023. Amended by 2004 Ga. Laws 533, § 54, eff. 7/1/2004.