PRINTER'S NO. 840
No. 742 Session of 1975
INTRODUCED BY ROMANELLI, SCHMITT, MISCEVICH, DOMBROWSKI,
WANSACZ, CESSAR, USTYNOSKI AND FINEMAN, MARCH 17, 1975
REFERRED TO COMMITTEE ON CONSUMER PROTECTION, MARCH 18, 1975
AN ACT
1 Amending Title 15 (Corporations and Unincorporated Associations)
2 of the Pennsylvania Consolidated Statutes, permitting
3 fraternal benefit societies to pay certain dividends.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Sections 7546 and 7553 of Title 15, act of
7 November 25, 1970 (P.L.707, No.230), known as the Pennsylvania
8 Consolidated Statutes, amended November 15, 1972 (P.L.1063,
9 No.271), are amended to read:
10 § 7546. Income from corporate activities.
11 A nonprofit corporation whose lawful activities involve among
12 other things the charging of fees or prices for its services or
13 products, shall have the right to receive such income and, in so
14 doing, may make an incidental profit. All such incidental
15 profits shall be applied to the maintenance and operation of the
16 lawful activities of the corporation, and in no case shall be
17 divided or distributed in any manner whatsoever among the
18 members, directors, or officers of the corporation. As used in
1 this section the terms fees or prices do not include rates of
2 contribution, fees or dues levied under an insurance certificate
3 issued by a fraternal benefit society.
4 § 7553. Dividends prohibited; compensation and certain payments
5 authorized.
6 (a) General rule.--A nonprofit corporation shall not pay
7 dividends or distribute any part of its income or profits to its
8 members, directors, or officers. Nothing herein contained shall
9 prohibit a fraternal benefit society operating under the
10 insurance laws of Pennsylvania from paying dividends or refunds
11 by whatever name known pursuant to the terms of its insurance
12 contracts.
13 (b) Reasonable compensation for services.--A nonprofit
14 corporation may pay compensation in a reasonable amount to
15 members, directors, or officers for services rendered.
16 (c) Certain payments authorized.--A nonprofit corporation
17 may confer benefits upon members or nonmembers in conformity
18 with its purposes, may repay capital contributions, and may
19 redeem its subvention certificates or evidences of indebtedness,
20 as authorized by this article, except when the corporation is
21 currently insolvent or would thereby be made insolvent or
22 rendered unable to carry on its corporate purposes, or when the
23 fair value of the assets of the corporation remaining after such
24 conferring of benefits, payment or redemption would be
25 insufficient to meet its liabilities. A nonprofit corporation
26 may make distributions of cash or property to members upon
27 dissolution or final liquidation as permitted by this article.
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