Us Code § 40506 - Restrictions

Full text of Us Code United States Code § 40506 — Restrictions, with citation guidance and answers to common questions.

§ 40506. Restrictions

(a) Stock and Dividends.—The corporation may not issue stock or declare or pay a dividend.

(b) Political Activities.—The corporation or a director or officer as such may not contribute to, support, or participate in any political activity or in any manner attempt to influence legislation.

(c) Distribution of Income or Assets.—The income or assets of the corporation may not inure to the benefit of, or be distributed to, a director, officer, or member as such during the life of the corporation or on its dissolution or final liquidation. This subsection does not prevent the payment of—

(1) expenses of officers of the corporation in amounts approved by the board of directors; or

(2) appropriate aid to individuals to whom the Medal of Honor has been awarded, their widows, or their children, to carry out the purposes of the corporation.


(d) Loans.—The corporation may not make a loan to a director, officer, or employee. Directors and officers who vote for or assent to making a loan to a director, officer, or employee, and officers who participate in making the loan, are jointly and severally liable to the corporation for the amount of the loan until it is repaid.

(Pub. L. 105–225, Aug. 12, 1998, 112 Stat. 1334.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
40506(a) 36:802. Aug. 14, 1958, Pub. L. 85–642, §§9(a) (1st sentence words before last comma, last sentence), (b), 10, 12, 72 Stat. 599, 600.
40506(b) 36:800.  
40506(c) 36:799(a) (1st sentence words before last comma, last sentence).  
40506(d) 36:799(b).  

In subsection (a), the words "any shares of" are omitted as unnecessary.

In subsection (b), the words "support" and "any" are added for consistency in the revised title. The words "directly or indirectly, local or national" are omitted as unnecessary and for consistency in the revised title.

In subsection (c), before clause (1), the words "inure to the benefit of" are substituted for "inure to" for consistency in the revised title. In clause (1), the words "bona fide" are omitted as unnecessary.

About This Section

36 U.S.C. § 40506 is part of Title 36 of the United States Code. The United States Code is the official codification of federal statutes maintained by the Office of the Law Revision Counsel of the U.S. House of Representatives. Congress amends the Code through new public laws, which are eventually incorporated into the relevant title.

This section may be cited in legal writing as 36 U.S.C. § 40506. For the most current official text, including any recent amendments, use the official source links below. Do not rely on this page as the sole authority for legal citation or litigation.

How to Read This Statute

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Frequently Asked Questions About Us Code § 40506

What does United States Code § 40506 cover?

Section 40506 ("Restrictions") is part of the United States Code, the codified statutory law of Us Code. 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 Us Code § 40506?

A common citation format is "United States Code § 40506" (Us Code). 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 Us Code law?

No. This page is for research and education and may not include the most recent amendments. For official current law, check the Us Code official source linked on this page or consult a licensed Us Code attorney.

How does Us Code § 40506 apply to my situation?

Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Us Code 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 Us Code.