Utah Code § 16-6a-1301 Distributions prohibited.
16-6a-1301. Distributions prohibited.
Except as authorized by Section 16-6a-1302, a nonprofit corporation may not make a distribution.
Enacted by Chapter 300, 2000 General Session
Distributions
Utah Code tit. 16, ch. 16-6a, pt. 16-6a-P13
in effectUtah Code § 16-6a-1302 Authorized distributions.
16-6a-1302. Authorized distributions.
(1) A nonprofit corporation may:
(a) make distributions or distribute the nonprofit corporation's assets to a:
(i) member that is a domestic or foreign nonprofit corporation;
(ii) member of a mutual benefit corporation, not inconsistent with its bylaws;
(iii) shareholder of a water company in a manner consistent with its articles of incorporation, bylaws, and the provisions of this chapter; or
(iv) governmental entity;
(b) pay compensation in a reasonable amount to its members, directors, or officers for services rendered;
(c) if a cooperative nonprofit corporation, make distributions consistent with its purposes; and
(d) confer benefits upon its members in conformity with its purposes.
(2) A nonprofit corporation may make distributions upon dissolution as follows:
(a) to a member that is a domestic or foreign nonprofit corporation;
(b) to its members if it is a mutual benefit corporation;
(c) to a shareholder of a water company in proportion to the shareholder's interest in the water company, consistent with the water company's articles of incorporation and bylaws;
(d) to another nonprofit corporation, including a nonprofit corporation organized to receive the assets of and function in place of the dissolved nonprofit corporation; and
(e) otherwise in conformity with Part 14, Dissolution.
(3) Authorized distributions by a dissolved nonprofit corporation may be made by authorized officers or directors, including those elected, hired, or otherwise selected after dissolution if the election, hiring, or other selection after dissolution is not inconsistent with the articles of incorporation and bylaws existing at the time of dissolution.
Amended by Chapter 358, 2017 General Session
Source: Utah Office of Legislative Research and General Counsel (le.utah.gov)URL: https://le.utah.gov/xcode/Title16/Chapter6A/16-6a-P13.html?v=C16-6a-P13_1800010118000101Fetched: 10/26/2026