Section 610 – Purchase of memberships.

• (1) Unless otherwise provided in the articles of incorporation or the bylaws, a nonprofit corporation may not purchase the membership of a member:
  • (a) who resigns; or
  • (b) whose membership is terminated.

• (2)
  • (a) If so authorized, a nonprofit corporation may purchase the membership of a member who resigns or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by:
    • (i) its articles of incorporation or its bylaws; or
    • (ii) agreement with the affected member.
  • (b) A payment permitted under Subsection (2)(a) may not violate:
    • (i) Section 16-6a-1301; or
    • (ii) any other provision of this chapter.

• (3) A mutual benefit corporation may purchase a member’s membership if, after the purchase is completed:
  • (a) the mutual benefit corporation would be able to pay its debts as they become due in the usual course of its activities; and
  • (b) the mutual benefit corporation’s total assets would at least equal the sum of its total liabilities.

• (4) A water company may purchase the shares of a shareholder who is delinquent in payment of shareholder assessments, in accordance with Chapter 4, Share Assessment Act.

Amended by Chapter 358, 2017 General Session