Colorado § 7-128-403 - Liability of directors for unlawful distributions.
Full text of Colorado Colorado Revised Statutes § 7-128-403 — Liability of directors for unlawful distributions., with citation guidance and answers to common questions.
§ 7-128-403. Liability of directors for unlawful distributions.
(1) A director who votes for or assents to a distribution made in violation of section 7-133-101 or the articles of incorporation is personally liable to the nonprofit corporation for the amount of the distribution that exceeds what could have been distributed without violating said section or the articles of incorporation if it is established that the director did not perform the director's duties in compliance with section 7-128-401. In any proceeding commenced under this section, a director shall have all of the defenses ordinarily available to a director.
(2) A director held liable under subsection (1) of this section for an unlawful distribution is entitled to contribution:
(a) From every other director who could be held liable under subsection (1) of this section for the unlawful distribution; and
(b) From each person who accepted the distribution knowing the distribution was made in violation of section 7-133-101 or the articles of incorporation, the amount of the contribution from such person being the amount of the distribution to that person that exceeds what could have been distributed to that person without violating section 7-133-101 or the articles of incorporation.
Source: L. 97: Entire article added, p. 699, § 3, effective July 1, 1998.
PART 5
DIRECTORS' CONFLICTING INTEREST TRANSACTIONS
Law reviews: For article, "Owner Association Board Member Duties and Liabilities -- Part 1", see 50 Colo. Law. 20 (June 2021).
Source: official Colorado text · Last verified 2026-08-27
Frequently Asked Questions About Colorado § 7-128-403
What does Colorado Revised Statutes § 7-128-403 cover?
Section 7-128-403 ("Liability of directors for unlawful distributions.") is part of the Colorado Revised Statutes, the codified statutory law of Colorado. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Colorado § 7-128-403?
A common citation format is "Colorado Revised Statutes § 7-128-403" (Colorado). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Colorado law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Colorado official source linked on this page or consult a licensed Colorado attorney.
How does Colorado § 7-128-403 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Colorado can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Colorado.