Utah § 16-16-1007 - Limitations on distributions.

Full text of Utah Utah Code § 16-16-1007 — Limitations on distributions., with citation guidance and answers to common questions.

§ 16-16-1007. Limitations on distributions.

16-16-1007.  Limitations on distributions.
(1) A limited cooperative association may not make a distribution if, after the distribution:
(a) the association would not be able to pay its debts as they become due in the ordinary course of the association's activities; or
(b) the association's assets would be less than the sum of its total liabilities.
(2) A limited cooperative association may base a determination that a distribution is not prohibited under Subsection (1) on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
(3) Except as otherwise provided in Subsection (4), the effect of a distribution allowed under Subsection (2) is measured:
(a) in the case of distribution by purchase, redemption, or other acquisition of financial rights in the limited cooperative association, as of the date money or other property is transferred or debt is incurred by the association; and
(b) in all other cases, as of the date:
(i) the distribution is authorized, if the payment occurs not later than 120 days after that date; or
(ii) the payment is made, if payment occurs more than 120 days after the distribution is authorized.
(4) If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.
(5) For purposes of this section, "distribution" does not include reasonable amounts paid to a member in the ordinary course of business as payment or compensation for commodities, goods, past or present services, or reasonable payments made in the ordinary course of business under a bona fide retirement or other benefits program.


Enacted by Chapter 363, 2008 General Session

Related Utah Legal Topics

Frequently Asked Questions About Utah § 16-16-1007

What does Utah Code § 16-16-1007 cover?

Section 16-16-1007 ("Limitations on distributions.") is part of the Utah Code, the codified statutory law of Utah. 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 Utah § 16-16-1007?

A common citation format is "Utah Code § 16-16-1007" (Utah). 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 Utah law?

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

How does Utah § 16-16-1007 apply to my situation?

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