Senate Bill sb2056er

    ENROLLED

    2004 Legislature                                       SB 2056



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  2         An act relating to corporations not for profit;

  3         amending s. 617.0505, F.S.; providing

  4         exceptions to a prohibition against such

  5         corporations paying dividends to members,

  6         officers, or directors; authorizing a

  7         corporation to make distributions to certain

  8         nonprofit corporations or governmental

  9         entities; providing an effective date.

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11  Be It Enacted by the Legislature of the State of Florida:

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13         Section 1.  Section 617.0505, Florida Statutes, is

14  amended to read:

15         617.0505  Payment of dividends and distribution of

16  income to members prohibited; issuance of certificates of

17  membership; effect of stock issued under prior law.--

18         (1)  A dividend may not be paid, and any part of the

19  income or profit of a corporation may not be distributed, to

20  its members, directors, or officers. A corporation may pay

21  compensation in a reasonable amount to its members, directors,

22  or officers for services rendered, may confer benefits upon

23  its members in conformity with its purposes, and, upon

24  dissolution or final liquidation, may make distributions to

25  its members as permitted by this act. If expressly permitted

26  by its articles of incorporation, a corporation may make

27  distributions upon partial liquidation to its members, as

28  permitted by this section. Any such payment, benefit, or

29  distribution does not constitute a dividend or a distribution

30  of income or profit for purposes of this section.  Any

31  corporation which is a utility exempt from regulation under s.


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CODING: Words stricken are deletions; words underlined are additions.




    ENROLLED

    2004 Legislature                                       SB 2056



 1  367.022(7), whose articles of incorporation state that it is

 2  exempt from taxation under s. 501(c)(12) of the Internal

 3  Revenue Code, may make such refunds to its members, prior to a

 4  dissolution or liquidation, as its managing board deems

 5  necessary to establish or preserve its tax-exempt status.  Any

 6  such refund does not constitute a dividend or a distribution

 7  of income or profit for purposes of this section.

 8         (2)  Subject to subsection (1), a corporation may issue

 9  certificates in any form evidencing membership in the

10  corporation.

11         (3)  Stock certificates issued under former s.

12  617.011(2), Florida Statutes (1989), constitute membership

13  certificates for purposes of this act.

14         (4)  Notwithstanding subsection (1) and s.

15  617.01401(5), a corporation may make distributions to one or

16  more of the following if such distribution does not inure to

17  the benefit of any individual or for-profit entity:

18         (a)  Corporations not for profit that are organized and

19  operated for the same or substantially similar purposes as the

20  distributing corporation;

21         (b)  Entities that are organized and operated

22  exclusively for charitable, benevolent, educational, or

23  similar purposes, or are otherwise exempt from federal income

24  taxation under s. 501(c) of the Internal Revenue Code; or

25         (c)  The United States, a state or possession of the

26  United States, or any political subdivision thereof.

27         Section 2.  This act shall take effect July 1, 2004.

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