---
title: O.C.G.A. § 14-3-1302. Exceptions to prohibition against distributions.
collection: code
id: 14-3-1302
cite_as: O.C.G.A. § 14-3-1302 (2025)
canonical_url: https://georgiacommons.org/code/14-3-1302
md_url: https://georgiacommons.org/code/14-3-1302.md
text_url: https://georgiacommons.org/code/14-3-1302/text
source_url: https://www.legis.ga.gov/api/document/docs/default-source/joint-features-document-library/t14-(v12)-pdf.pdf?sfvrsn=82868bd8_0#page=178
date: 2025
status: active
corpus_version: 2025-supplement-89aa39ab3c68
license: CC0-1.0
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
up: https://georgiacommons.org/code/14-3.md
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index: https://georgiacommons.org/code/index.md
version: the only printed version
in_force: true
current_through: Including Acts of the 2025 Regular Session of the General Assembly
heading_path: CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS / NONPROFIT CORPORATIONS / DISTRIBUTIONS
---

# O.C.G.A. § 14-3-1302. Exceptions to prohibition against distributions.

(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.

## 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).