N.Y. Not-for-Profit Corporation Law § 515: Dividends prohibited; certain distributions of cash or property authorized

§ 515. Dividends prohibited; certain distributions of cash or property

authorized.

(a) A corporation shall not pay dividends or distribute any part of

its income or profit to its members, directors, or officers.

(b) A corporation may pay compensation in a reasonable amount to

members, directors, or officers, for services rendered, and may make

distributions of cash or property to members upon dissolution or final

liquidation as permitted by this chapter. No person who may benefit from

such compensation may be present at or otherwise participate in any

board or committee deliberation or vote concerning such person's

compensation; provided that nothing in this section shall prohibit the

board or authorized committee from requesting that a person who may

benefit from such compensation present information as background or

answer questions at a committee or board meeting prior to the

commencement of deliberations or voting relating thereto. Nothing in

this section or in paragraph (h) of section seven hundred fifteen of

this chapter shall be construed to prohibit a director from deliberating

or voting concerning compensation for service on the board that is to be

made available or provided to all directors of the corporation on the

same or substantially similar terms.

(c) A corporation may confer benefits upon members or nonmembers in

conformity with its purposes, may redeem its capital certificates or

subvention certificates, and may make other distributions of cash or

property to its members or former members, directors, or officers prior

to dissolution or final liquidation, as authorized by this article,

except when the corporation is currently insolvent or would thereby be

made insolvent or rendered unable to carry on its corporate purposes, or

when the fair value of the corporation's assets remaining after such

conferring of benefits, or redemption, or other distribution would be

insufficient to meet its liabilities.