Colorado § 7-40-107 - Dividend only on dissolution.

§ 7-40-107. Dividend only on dissolution.

No dividend or distribution of the property of any such corporation, association, or society shall be made until all debts are fully paid and then only upon its final dissolution and surrender of organization and name, nor shall any distribution be made except by a vote of a majority of the members. When a distribution of any of their property is contemplated, the directors, trustees, or managers shall file a statement, under oath, in the office of the recorder of deeds in the county in which the business office is located that all debts of the corporation, association, or society are paid, and, in case a distribution is made before filing this statement under oath or if the statement is willfully false, said directors, trustees, or managers shall be jointly and severally liable for the debts of such corporation, association, or society. When a final dissolution of any such corporation, association, or society, formed by virtue of law, has been agreed upon, the directors, trustees, or managers shall file, in the office of the secretary of state, a certificate thereof under seal of the corporation, association, or society, and upon filing this certificate the organization shall cease to exist.

Source: G.L. § 228. G.S. § 371. R.S. 08: § 1017. C.L. § 2383. CSA: C. 41, § 176. CRS 53: § 31-20-7. C.R.S. 1963: § 31-19-7. L. 2003: Entire section amended, p. 2204, § 8, effective July 1, 2004.

ANNOTATION

An insurance company is in violation of this section when it issues certificates to its members entitling them to cash payments from a reserve or profit fund. Int'l Serv. Union Co. v. People ex rel. Wettengel, 101 Colo. 1, 70 P.2d 431 (1937).

A complaint alleging that a terminated member of a nonprofit corporation had demanded an accounting and the right to inspect the books of the corporation to determine the member's fair share of the assets upon dissolution, which rights had been denied, is sufficient as against a motion to dismiss for failure to state a claim; inasmuch as a member of a nonprofit corporation has the right to inspect the books and records of the corporation, and a member of a nonprofit corporation is entitled to be informed concerning the business activities conducted by the corporation. Bill Reno, Inc. v. Rocky Mt. Ford Dealers' Adv. Ass'n, 151 Colo. 406, 378 P.2d 206 (1963).