Distributions prohibited; Compensation and other permitted payments

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  1. (a) Except as otherwise provided in subsection (b), an unincorporated nonprofit association may not pay dividends or make distributions to a member or manager.

  2. (b) An unincorporated nonprofit association may:

    1. (1) pay reasonable compensation or reimburse reasonable expenses to a member or manager for services rendered;

    2. (2) confer benefits on a member or manager in conformity with its nonprofit purposes;

    3. (3) repurchase a membership and repay a capital contribution made by a member to the extent authorized by its governing principles; or

    4. (4) make distributions of property to members upon winding up and termination to the extent permitted by § 4-28-629.


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