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Official Code of Georgia Annotated

Title 14. CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS · Chapter 3. NONPROFIT CORPORATIONS · Article 13. DISTRIBUTIONS

14-3-1302. Exceptions to prohibition against distributions.

Active

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

  1. (a)

    Payments to any of the following are not unlawful distributions:#

    1. (1)

      Organizations whether or not incorporated that are organized and operated for the same or similar purposes as the distributing corporation;#

    2. (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. (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.#

  2. (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. (1)

      The corporation would be able to pay its debts as they become due in the normal course of business; and#

    2. (2)

      The corporation’s total assets would at least equal the sum of its liabilities.#

  3. (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.#

The notes below are printed with the section but are not enacted law (O.C.G.A. § 1-1-1(c)). They are shown apart from the text.

History

Code 1981, § 14-3-1302, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 2004, p. 508, § 54; Ga. L. 2023, p. 419, § 1-1/SB 148, effective July 1, 2023.

Amendments

The 2023 amendment, effective July 1, 2023, substituted “Payments to any of the following are not unlawful distributions” for “A corporation may make distributions to the following” in the beginning of subsection (a) and inserted “amateur” following “international” in paragraph (a)(2); in the beginning of subsection (b), rewrote the introductory language, which read: “Except for corporations described in paragraph (2) of subsection (a) of this Code section, a corporation may repurchase a membership for the consideration that the member paid for his or her membership if, after the purchase is completed:”; and added subsection (c).

Read the official page (the state's PDF, opened at the page this text was read from).

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

Text read from t14-(v12)-pdf.pdf, Volume V12, 2017 edition, 2025 supplement, pages 178 to 179; merge action: replaced; file SHA-256 b004123363dc.