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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY GREENLEAF AND RAFFERTY, JANUARY 12, 2011 |
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| REFERRED TO JUDICIARY, JANUARY 12, 2011 |
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| AN ACT |
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1 | Amending Title 15 (Corporations and Unincorporated Associations) |
2 | of the Pennsylvania Consolidated Statutes, extensively |
3 | regulating unincorporated nonprofit associations in the areas |
4 | of organic nature, structure, formation, alteration, |
5 | management, participation, functions, liability and |
6 | dissolution. |
7 | The General Assembly of the Commonwealth of Pennsylvania |
8 | hereby enacts as follows: |
9 | Section 1. Section 153(a) of Title 15 of the Pennsylvania |
10 | Consolidated Statutes is amended to read: |
11 | § 153. Fee schedule. |
12 | (a) General rule.--[(Repealed).] The fees of the bureau, |
13 | including fees for the public acts and transactions of the |
14 | Secretary of the Commonwealth administered through the bureau, |
15 | shall be as follows: |
16 | (1) Unincorporated nonprofit associations: | |
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17 18 | (i) Statement appointing an agent to receive service of process................................ | 70 | 19 | (ii) Resignation of appointed agent.......... | 40 | 20 | (iii) Amendment or cancellation of statement | | | 1 | appointing an agent............................... | 70 |
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2 | (2) (Reserved). |
3 | Section 2. Chapter 91 heading and sections 9101, 9102 and |
4 | 9103 of Title 15 are amended to read: |
5 | CHAPTER 91 |
6 | [UNINCORPORATED ASSOCIATIONS GENERALLY] |
7 | UNINCORPORATED NONPROFIT |
8 | ASSOCIATIONS |
9 | [§ 9101. Customary parliamentary law applicable. |
10 | Except as otherwise provided by statute or by the organic |
11 | documents under which an unincorporated association is |
12 | constituted, each unincorporated association shall be governed |
13 | by customary usages and principles of parliamentary law and |
14 | procedure. |
15 | § 9102. Funeral and similar benefits. |
16 | Members of unincorporated associations paying periodic or |
17 | funeral benefits shall not be individually liable for the |
18 | payment of periodic or funeral benefits or other similar |
19 | liabilities of the association. The liabilities shall be payable |
20 | only out of the treasury of the association. |
21 | § 9103. Nontransferable membership interests. |
22 | (a) General rule.--For the purpose of encouraging lawful |
23 | associational activity among agricultural and industrial workers |
24 | through the organization of unincorporated associations for |
25 | mutual benefit insurance, saving or other lawful objects where |
26 | the persons so organizing derive benefits from the preservation |
27 | and continuance of the membership and interest among persons |
28 | engaged in a common calling, labor or enterprise, the |
29 | unincorporated association may provide, in its organic |
30 | documents, that membership in the association or interest in its |
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1 | funds or property shall be nontransferable without the consent |
2 | of the association. |
3 | (b) Assignments and pledges.--No attempted assignment, |
4 | transfer or pledge of a membership or interest made in violation |
5 | of a transfer restriction adopted pursuant to subsection (a) |
6 | shall pass any right or interest, legal or equitable, to the |
7 | person to whom it is attempted to be made if the transfer |
8 | restriction is brought to the knowledge of that person. |
9 | (c) Knowledge of nontransferability.--Whenever the interest |
10 | of a member in the funds or property of any unincorporated |
11 | association subject to subsection (a) is evidenced by a |
12 | certificate, an endorsement thereon that the certificate is |
13 | nontransferable shall be conclusive evidence that the person to |
14 | whom any attempted assignment, transfer or pledge of the |
15 | certificate is made has knowledge of the nontransferable |
16 | character of the interest of the member.] |
17 | Section 3. Title 15 is amended by adding sections to read: |
18 | § 9111. Short title and application of chapter. |
19 | (a) Short title.--This chapter shall be known and may be |
20 | cited as the Pennsylvania Uniform Unincorporated Nonprofit |
21 | Association Law. |
22 | (b) Transitional provisions concerning property.-- |
23 | (1) If, before {the Legislative Reference Bureau shall |
24 | insert here the effective date of this chapter}, an interest |
25 | in property was by the terms of a transfer purportedly |
26 | transferred to a nonprofit association but under the law of |
27 | this Commonwealth the interest did not vest in the nonprofit |
28 | association, or in one or more persons on behalf of the |
29 | nonprofit association under paragraph (2), on {the |
30 | Legislative Reference Bureau shall insert here the effective |
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1 | date of this chapter}, the interest vests in the nonprofit |
2 | association, unless the parties to the transfer have treated |
3 | the transfer as ineffective. |
4 | (2) If, before {the Legislative Reference Bureau shall |
5 | insert here the effective date of this chapter}, an interest |
6 | in property was by the terms of a transfer purportedly |
7 | transferred to a nonprofit association but the interest was |
8 | vested in one or more persons to hold the interest for the |
9 | nonprofit association, its members or both, on or after {the |
10 | Legislative Reference Bureau shall insert here the effective |
11 | date of this chapter}, the persons, or their successors in |
12 | interest, may transfer the interest to the nonprofit |
13 | association in its name; or the nonprofit association may |
14 | require that the interest be transferred to it in its name. |
15 | (c) Savings provisions.-- |
16 | (1) This chapter supplements the law of this |
17 | Commonwealth that applies to nonprofit associations operating |
18 | in this Commonwealth, but if a conflict exists between this |
19 | chapter and other law, the other law applies. |
20 | (2) Nothing in this chapter shall be deemed to repeal or |
21 | supersede any provision in section 7 of the act of April 26, |
22 | 1855 (P.L.328, No.347), entitled "An act relating to |
23 | Corporations and to Estates held for Corporate, Religious and |
24 | Charitable uses." |
25 | (d) Cross reference.--See section 5331 (relating to |
26 | unincorporated associations). |
27 | § 9112. Definitions. |
28 | The following words and phrases when used in this chapter |
29 | shall have the meanings given to them in this section unless the |
30 | context clearly indicates otherwise: |
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1 | "Governing principles." The agreements, whether oral, in |
2 | record form or implied from course of conduct, that govern the |
3 | purpose or operation of a nonprofit association and the rights |
4 | and obligations of its members and managers. The term includes |
5 | any amendment or restatement of the agreements constituting the |
6 | governing principles. |
7 | "Manager." A person that is responsible, alone or in concert |
8 | with others, for the management of a nonprofit association. |
9 | "Member." A person that, under the governing principles, may |
10 | participate in the selection of persons authorized to manage the |
11 | affairs of the nonprofit association or in the development of |
12 | policies and activities of the nonprofit association. |
13 | "Nonprofit association." An unincorporated organization |
14 | consisting of two or more members joined for one or more common, |
15 | nonprofit and lawful purposes. The term does not include: |
16 | (1) a trust; |
17 | (2) a marriage, domestic partnership, common law |
18 | domestic relationship, civil union or other domestic living |
19 | arrangement; |
20 | (3) an organization formed under any other statute that |
21 | governs the organization and operation of unincorporated |
22 | associations; |
23 | (4) a professional association subject to Chapter 93 |
24 | (relating to professional associations); |
25 | (5) a limited liability company operating or formed for |
26 | a nonprofit purpose; |
27 | (6) a joint tenancy, tenancy in common or tenancy by the |
28 | entireties, even if the co-owners share use of the property |
29 | for a nonprofit purpose; or |
30 | (7) a relationship under an agreement in record form |
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1 | that expressly provides that the relationship between the |
2 | parties does not create a nonprofit association. |
3 | § 9113. Governing law. |
4 | (a) Operations.--Except as provided in subsection (b), the |
5 | law of this Commonwealth governs the operation in this |
6 | Commonwealth of all nonprofit associations formed or operating |
7 | in this Commonwealth. |
8 | (b) Internal affairs.--Unless the governing principles |
9 | specify a different jurisdiction, the law of the jurisdiction in |
10 | which a nonprofit association has its main place of activities |
11 | governs the internal affairs of the nonprofit association. |
12 | § 9114. Entity status. |
13 | (a) Legal entity.--A nonprofit association is a legal entity |
14 | distinct from its members and managers. |
15 | (b) Perpetual duration.--A nonprofit association has |
16 | perpetual duration unless the governing principles specify |
17 | otherwise. |
18 | (c) Powers.--A nonprofit association has the same powers as |
19 | an individual to do all things necessary or convenient to carry |
20 | on its purposes. |
21 | (d) Profits.--A nonprofit association may engage in profit- |
22 | making activities, but profits from any activities must be used |
23 | or set aside for the nonprofit purposes of the nonprofit |
24 | association. |
25 | § 9115. Ownership and transfer of property. |
26 | (a) General rule.--A nonprofit association may acquire, |
27 | hold, encumber or transfer in its name an interest in real or |
28 | personal property. |
29 | (b) Testamentary and fiduciary dispositions.--A nonprofit |
30 | association may be a beneficiary of a trust or contract, a |
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1 | legatee or a devisee. |
2 | § 9116. Statement of authority as to real property. |
3 | (a) General rule.--An interest in real property held in the |
4 | name of a nonprofit association may be encumbered or transferred |
5 | by a person authorized to do so in a statement of authority |
6 | recorded by the nonprofit association in the office of the |
7 | recorder of deeds for the county in which a transfer of the |
8 | property would be recorded. |
9 | (b) Contents of statement.--The statement of authority must |
10 | set forth: |
11 | (1) the name of the nonprofit association; |
12 | (2) the address in this Commonwealth, including the |
13 | street and number, if any, of the nonprofit association or, |
14 | if the nonprofit association does not have an address in this |
15 | Commonwealth, its address outside of this Commonwealth; |
16 | (3) that the association is a nonprofit association; and |
17 | (4) the name, title or position of a person authorized |
18 | to encumber or transfer an estate or interest in real |
19 | property held in the name of the nonprofit association. |
20 | (c) Execution.--A statement of authority must be executed in |
21 | the same manner as a deed by a person other than the person |
22 | authorized in the statement to encumber or transfer an estate or |
23 | interest. |
24 | (d) Recording fee.--The recorder of deeds may collect a fee |
25 | for recording a statement of authority in the amount authorized |
26 | for recording a transfer of real property, but the mere |
27 | recording of a statement of authority does not constitute a |
28 | transfer of an interest in the real property for the purpose of |
29 | the taxation of real property transfers. |
30 | (e) Changes.--A document amending, revoking or canceling a |
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1 | statement of authority or stating that the statement is |
2 | unauthorized or erroneous must meet the requirements for |
3 | executing and recording an original statement. |
4 | (f) Cancellation by operation of law.--Unless canceled |
5 | earlier, a recorded statement of authority and its most recent |
6 | amendment expire five years after the date of the most recent |
7 | recording. |
8 | (g) Effect of filing.--If the record title to real property |
9 | is in the name of a nonprofit association and a statement of |
10 | authority is recorded in the office of the recorder of deeds for |
11 | the county in which a transfer of the property would be |
12 | recorded, the authority of the person named in the statement to |
13 | encumber or transfer is conclusive in favor of a person that |
14 | gives value without notice that the person lacks authority. |
15 | § 9117. Liability. |
16 | (a) General rule.--A debt, obligation or other liability of |
17 | a nonprofit association, whether arising in contract, tort or |
18 | otherwise: |
19 | (1) is solely the debt, obligation or other liability of |
20 | the nonprofit association; and |
21 | (2) does not become a debt, obligation or other |
22 | liability of a member or manager solely: |
23 | (i) because of a person's status as a member or |
24 | manager; or |
25 | (ii) because: |
26 | (A) a member acts as a member; or |
27 | (B) a manager acts as a manager. |
28 | (b) Liability for conduct.--A person's status as a member or |
29 | manager does not prevent or restrict law other than this chapter |
30 | from imposing liability on the person or the nonprofit |
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1 | association because of the person's conduct. |
2 | (c) Agents.--A person that makes a contract or incurs an |
3 | obligation on behalf of a nonprofit association after {the |
4 | Legislative Reference Bureau shall insert here the effective |
5 | date of this chapter} is not liable for performance or breach of |
6 | the contract or other obligation if the fact that the person was |
7 | acting for the nonprofit association was disclosed to, was known |
8 | by or reasonably should have been known by the other party to |
9 | the contract or to the party owed performance. |
10 | § 9118. Assertion and defense of claims. |
11 | (a) General rule.--A nonprofit association may sue or be |
12 | sued in its own name. |
13 | (b) Permissible claims.--A member or manager may assert a |
14 | claim the member or manager has against the nonprofit |
15 | association. A nonprofit association may assert a claim it has |
16 | against a member or manager. |
17 | (c) Representational status.--A nonprofit association may |
18 | assert a claim in its name on behalf of its members if one or |
19 | more members of the nonprofit association have standing to |
20 | assert a claim in their own right, the interests the nonprofit |
21 | association seeks to protect are germane to its purposes and |
22 | neither the claim asserted nor the relief requested requires the |
23 | participation of a member. |
24 | § 9119. Effect of judgment or order. |
25 | A judgment or order against a nonprofit association is not by |
26 | itself a judgment or order against a member or manager. |
27 | § 9120. Appointment of agent to receive service of process. |
28 | (a) General rule.--A nonprofit association may deliver to |
29 | the department for filing a statement appointing an agent to |
30 | receive service of process. |
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1 | (b) Contents of statement.--A statement appointing an agent |
2 | to receive service of process must set forth: |
3 | (1) the name of the nonprofit association; and |
4 | (2) the name of the person in this Commonwealth |
5 | authorized to receive service of process and the person's |
6 | address, including street and number, in this Commonwealth. |
7 | (c) Signature of statement.--A statement appointing an agent |
8 | to receive service of process must be signed by a person |
9 | authorized to manage the affairs of the nonprofit association |
10 | and by the person appointed as the agent. By signing the |
11 | statement the person becomes the agent. |
12 | (d) Amendment or cancellation.--An amendment to or |
13 | cancellation of a statement appointing an agent to receive |
14 | service of process must meet the requirements for signature of |
15 | an original statement. An agent may resign by delivering a |
16 | resignation to the department for filing and giving notice to |
17 | the nonprofit association. |
18 | (e) Cross references.--See section 135 (relating to |
19 | requirements to be met by filed documents). |
20 | § 9121. Action or proceeding not abated by change of members or |
21 | managers. |
22 | An action or proceeding against a nonprofit association does |
23 | not abate merely because of a change in its members or managers. |
24 | § 9122. Member not agent. |
25 | A member is not an agent of the nonprofit association solely |
26 | by reason of being a member. |
27 | § 9123. Approval by members. |
28 | (a) General rule.--Except as provided in the governing |
29 | principles, a nonprofit association must have the approval of |
30 | its members to: |
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1 | (1) admit, suspend, dismiss or expel a member; |
2 | (2) select or dismiss a manager; |
3 | (3) adopt, amend or repeal the governing principles; |
4 | (4) sell, lease, exchange or otherwise dispose of all or |
5 | substantially all, of the association's property, with or |
6 | without the association's goodwill, outside the ordinary |
7 | course of its activities; |
8 | (5) dissolve under section 9134 (relating to |
9 | dissolution); |
10 | (6) undertake any other act outside the ordinary course |
11 | of the association's activities; or |
12 | (7) determine the policy and purposes of the |
13 | association. |
14 | (b) Other actions.--A nonprofit association must have the |
15 | approval of the members to do any other act or exercise a right |
16 | that the governing principles require to be approved by members. |
17 | § 9124. Action by members. |
18 | (a) General rule.--Except as provided in the governing |
19 | principles: |
20 | (1) approval of a matter by the members requires the |
21 | affirmative vote of at least a majority of the votes cast at |
22 | a meeting of members; and |
23 | (2) each member is entitled to one vote on each matter |
24 | that is submitted for approval by the members. |
25 | (b) Procedural matters.--The governing principles may |
26 | provide for the: |
27 | (1) calling, location and timing of meetings of the |
28 | members; |
29 | (2) notice and quorum requirements for member meetings; |
30 | (3) conduct of member meetings; |
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1 | (4) taking of action by the members by consent without a |
2 | meeting or by ballot; and |
3 | (5) participation by members in a meeting of the members |
4 | by telephone or other means of electronic communication. |
5 | (c) Absence of governing principles.--If the governing |
6 | principles do not provide for a matter described in subsection |
7 | (b), customary usages and principles of parliamentary law and |
8 | procedure apply. |
9 | § 9125. Duties of member. |
10 | (a) No fiduciary duties generally.--A member does not have a |
11 | fiduciary duty to a nonprofit association or to another member |
12 | solely by being a member. |
13 | (b) Discharge of duties and exercise of rights.--A member |
14 | shall discharge duties to the nonprofit association and the |
15 | other members under the governing principles and shall exercise |
16 | any rights under the governing principles and this chapter |
17 | consistent with the governing principles and the obligation of |
18 | good faith and fair dealing. |
19 | § 9126. Membership. |
20 | (a) Admission, suspension, dismissal and expulsion of |
21 | member.-- |
22 | (1) A person becomes a member and may be suspended, |
23 | dismissed or expelled in accordance with the governing |
24 | principles. If there are no applicable governing principles, |
25 | a person may become a member or be suspended, dismissed or |
26 | expelled only with the approval of the members. A person may |
27 | not be admitted as a member without the person's consent. |
28 | (2) Except as provided in the governing principles, the |
29 | suspension, dismissal or expulsion of a member does not |
30 | relieve the member from any unpaid capital contribution, |
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1 | dues, assessments, fees or other obligation incurred or |
2 | commitment made by the member before the suspension, |
3 | dismissal or expulsion. |
4 | (b) Resignation of member.-- |
5 | (1) A member may resign as a member in accordance with |
6 | the governing principles. In the absence of applicable |
7 | governing principles, a member may resign at any time. |
8 | (2) Except as provided in the governing principles, |
9 | resignation of a member does not relieve the member from any |
10 | unpaid capital contribution, dues, assessments, fees or other |
11 | obligation incurred or commitment made by the member before |
12 | resignation. |
13 | § 9127. Membership interest not transferable. |
14 | (a) General rule.--Except as set forth in subsection (b) or |
15 | the governing principles, a member's interest or any right under |
16 | the governing principles is not transferable. |
17 | (b) Certain nonprofit associations formed prior to effective |
18 | date.-- |
19 | (1) This subsection applies to a nonprofit association: |
20 | (i) which was formed before {the Legislative |
21 | Reference Bureau shall insert here the effective date of |
22 | this chapter}; |
23 | (ii) which was formed for the purpose of encouraging |
24 | lawful associational activity among agricultural and |
25 | industrial workers through the organization of a |
26 | nonprofit association for mutual benefit insurance, |
27 | saving or other lawful objects; and |
28 | (iii) in which the persons that organized the |
29 | nonprofit association derive benefits from the |
30 | preservation and continuance of the membership and |
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1 | interest among persons engaged in a common calling, labor |
2 | or enterprise. |
3 | (2) For a nonprofit association under paragraph (1), the |
4 | following apply: |
5 | (i) Except as set forth in subparagraph (ii), a |
6 | member's interest or any right under the governing |
7 | principles is transferable. |
8 | (ii) A member's interest or any right under the |
9 | governing principles is nontransferable if the governing |
10 | principles so provide. |
11 | (c) Assignments and pledges.--No legal or equitable right or |
12 | interest shall pass as a result of an attempted assignment, |
13 | transfer or pledge of a membership or an interest in violation |
14 | of: |
15 | (1) subsection (a); or |
16 | (2) a transfer restriction under subsection (b)(2)(ii). |
17 | (d) Knowledge of nontransferability.--Whenever the interest |
18 | of a member in a nonprofit association is evidenced by a |
19 | certificate, an endorsement on the certificate that the |
20 | certificate is nontransferable shall be conclusive evidence that |
21 | the person to whom any attempted assignment, transfer or pledge |
22 | of the certificate is made has knowledge of the nontransferable |
23 | character of the interest of the member. |
24 | § 9128. Selection and management rights of managers. |
25 | Except as provided in this chapter or the governing |
26 | principles: |
27 | (1) if a manager is not selected, all members are |
28 | managers; |
29 | (2) only the members may select a manager; |
30 | (3) a manager may be a member or a nonmember; and |
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1 | (4) all matters relating to the activities of the |
2 | nonprofit association are decided by its managers except for |
3 | matters reserved for approval by the members in section 9123 |
4 | (relating to approval by members). |
5 | § 9129. Duties of managers. |
6 | (a) Standard of care.-- |
7 | (1) A manager shall perform the duties for which a |
8 | manager is responsible or which the manager undertakes in |
9 | good faith; in a manner the manager reasonably believes to be |
10 | in the best interests of the nonprofit association and in |
11 | accordance with its purposes; and with such care, including |
12 | reasonable inquiry, skill and diligence, as a person of |
13 | ordinary prudence would use under similar circumstances. |
14 | (2) A manager may rely in good faith upon any opinion, |
15 | report, statement or other information provided by another |
16 | person that the manager reasonably believes is a competent |
17 | and reliable source for the information. |
18 | (b) Conflicts of interest.–- |
19 | (1) A manager owes a duty of loyalty to the nonprofit |
20 | association with respect to the responsibilities of the |
21 | manager. |
22 | (2) After full disclosure of all material facts, a |
23 | specific act or transaction, that would otherwise violate the |
24 | duty of loyalty by a manager, may be authorized or ratified |
25 | by a majority of the members that are not interested directly |
26 | or indirectly in the act or transaction. |
27 | (c) Presumption.--A manager that makes a judgment in good |
28 | faith satisfies the duties specified in subsection (a) if the |
29 | manager: |
30 | (1) is not interested, directly or indirectly, in the |
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1 | subject of the judgment and is otherwise able to exercise |
2 | independent judgment; |
3 | (2) is informed with respect to the subject of the |
4 | judgment to the extent the manager reasonably believes to be |
5 | appropriate under the circumstances; and |
6 | (3) believes that the judgment is in, or not opposed to, |
7 | the best interests of the nonprofit association. |
8 | (d) Limitation of liability.-- |
9 | (1) Except as set forth in paragraph (2), the governing |
10 | principles in record form may provide that a manager shall |
11 | not be personally liable, as a manager, for monetary damages |
12 | for any action taken unless: |
13 | (i) the manager has breached or failed to perform |
14 | the manager's duties under this chapter; and |
15 | (ii) the breach or failure to perform constitutes |
16 | self-dealing, willful misconduct or recklessness. |
17 | (2) Paragraph (1) shall not apply to: |
18 | (i) the responsibility or liability of a manager |
19 | under a criminal statute; or |
20 | (ii) the liability of the manager for the payment of |
21 | taxes under Federal, State or local law. |
22 | § 9130. Action by managers. |
23 | (a) General rule.--Except as provided in the governing |
24 | principles: |
25 | (1) approval of a matter by the managers requires the |
26 | affirmative vote of at least a majority of the votes cast at |
27 | a meeting of managers; and |
28 | (2) each manager is entitled to one vote on each matter |
29 | that is submitted for approval by the managers. |
30 | (b) Procedural matters.--The governing principles may |
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1 | provide for the: |
2 | (1) delegation to a manager of authority to act without |
3 | a meeting of the managers; |
4 | (2) creation and authority of committees of the |
5 | managers; |
6 | (3) calling, location and timing of meetings of the |
7 | managers or a committee of the managers; |
8 | (4) notice and quorum requirements for meetings of the |
9 | managers or a committee of the managers; |
10 | (5) conduct of meetings of the managers or a committee |
11 | of the managers; |
12 | (6) taking of action by the managers or a committee of |
13 | the managers by consent without a meeting or by ballot; |
14 | (7) participation by managers in a meeting of the |
15 | managers or a committee of the managers by telephone or other |
16 | means of electronic communication; and |
17 | (8) taking of action by a manager by proxy. |
18 | (c) Absence of governing principles.--If the governing |
19 | principles do not provide for a matter described in subsection |
20 | (b), customary usages and principles of parliamentary law and |
21 | procedure apply. |
22 | § 9131. Right of member or manager to information. |
23 | (a) Inspection.--On reasonable notice, a member or manager |
24 | of a nonprofit association may inspect and copy, at a reasonable |
25 | time and location specified by the nonprofit association, any |
26 | record maintained by the nonprofit association regarding its |
27 | activities, financial condition and other circumstances, to the |
28 | extent the information is material to the rights and duties of |
29 | the member or manager under the governing principles. |
30 | (b) Restrictions.--A nonprofit association may impose |
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1 | reasonable restrictions on access to and use of information to |
2 | be furnished under this section, including designating the |
3 | information confidential and imposing on the recipient |
4 | obligations of nondisclosure and safeguarding. |
5 | (c) Costs.--A nonprofit association may charge a person that |
6 | makes a demand under this section reasonable copying costs. |
7 | (d) Former member or manager.--A former member or manager is |
8 | entitled to information to which the member or manager was |
9 | entitled while a member or manager if: |
10 | (1) the information pertains to the period during which |
11 | the person was a member or manager; |
12 | (2) the former member or manager seeks the information |
13 | in good faith; and |
14 | (3) the former member or manager satisfies subsections |
15 | (a), (b) and (c). |
16 | § 9132. Distributions prohibited; compensation and other |
17 | permitted payments. |
18 | (a) General rule.--Except as provided in subsection (b), a |
19 | nonprofit association may not pay dividends or make |
20 | distributions to a member or manager. |
21 | (b) Permitted payments.--A nonprofit association may: |
22 | (1) pay reasonable compensation or reimburse reasonable |
23 | expenses to a member or manager for services rendered; |
24 | (2) confer benefits on or make contributions to a member |
25 | or manager in conformity with its nonprofit purposes; |
26 | (3) repurchase a membership and repay a capital |
27 | contribution made by a member to the extent authorized by its |
28 | governing principles; |
29 | (4) repay indebtedness to a member or manager; and |
30 | (5) make distributions of property to members upon |
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1 | winding up and termination to the extent permitted by section |
2 | 9135 (relating to winding up and termination). |
3 | § 9133. Reimbursement, indemnification and advancement of |
4 | expenses. |
5 | (a) Reimbursement.--Except as provided in the governing |
6 | principles, a nonprofit association shall reimburse a member or |
7 | manager for authorized expenses reasonably incurred in the |
8 | course of the activities of the member or manager on behalf of |
9 | the nonprofit association. |
10 | (b) Indemnification and advancement of expenses.-- |
11 | (1) A nonprofit association is subject to Ch. 57 Subch. |
12 | D (relating to indemnification). |
13 | (2) For purposes of applying Ch. 57 Subch. D, references |
14 | to the "articles" or "bylaws," "directors" and "members" |
15 | shall mean the "governing principles," "managers" and |
16 | "members," respectively. |
17 | § 9134. Dissolution. |
18 | (a) General rule.--A nonprofit association may be dissolved |
19 | as follows: |
20 | (1) if the governing principles provide a time or method |
21 | for dissolution, at that time or by that method; |
22 | (2) if the governing principles do not provide a time or |
23 | method for dissolution, upon approval by the members; |
24 | (3) if no member can be located and the operations of |
25 | the nonprofit association have been discontinued for at least |
26 | three years, by: |
27 | (i) the managers; or |
28 | (ii) if the nonprofit association has no current |
29 | manager, its last manager; |
30 | (4) by court order; or |
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1 | (5) under law other than this chapter. |
2 | (b) Continuation during winding up.--After dissolution, a |
3 | nonprofit association continues in existence until its |
4 | activities have been wound up and it is terminated under section |
5 | 9135 (relating to winding up and termination). |
6 | § 9135. Winding up and termination. |
7 | Winding up and termination of a nonprofit association must |
8 | proceed in accordance with the following rules: |
9 | (1) All known debts and liabilities must be paid or |
10 | adequately provided for. |
11 | (2) Any property subject to a condition requiring return |
12 | to the person designated by the donor must be transferred to |
13 | that person. |
14 | (3) Any property subject to a trust must be distributed |
15 | in accordance with the trust agreement. |
16 | (4) Any property committed to a charitable purpose shall |
17 | be distributed in accordance with that purpose unless the |
18 | nonprofit obtains a court order under 20 Pa.C.S. Ch. 77 |
19 | Subch. D (relating to creation, validity, modification and |
20 | termination of trust) specifying the disposition of the |
21 | property. |
22 | (5) Any remaining property shall be distributed as |
23 | follows: |
24 | (i) Distribution shall be made: |
25 | (A) in accordance with the governing principles |
26 | of the nonprofit association; or |
27 | (B) in the absence of applicable governing |
28 | principles, to the members of the nonprofit |
29 | association: |
30 | (I) per capita; or |
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1 | (II) as the members direct. |
2 | (ii) If subparagraph (i) does not apply, |
3 | distribution shall be made under Article XIII.1 of the |
4 | act of April 9, 1929 (P.L.343, No.176), known as The |
5 | Fiscal Code. |
6 | § 9136. Subordination of chapter to canon law. |
7 | If and to the extent canon law or similar principles |
8 | applicable to a nonprofit association organized for religious |
9 | purposes sets forth provisions relating to the government and |
10 | regulation of the affairs of the nonprofit association that are |
11 | inconsistent with the provisions of this chapter on the same |
12 | subject, the provisions of canon law or similar principles shall |
13 | control except to the extent prohibited by the Constitution of |
14 | the United States or the Constitution of Pennsylvania. |
15 | Section 4. This act shall take effect in 60 days. |
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