The Florida Senate

617.0505  Payment of dividends and distribution of income to members prohibited; issuance of certificates of membership; effect of stock issued under prior law.--

(1)  A dividend may not be paid, and any part of the income or profit of a corporation may not be distributed, to its members, directors, or officers. A private club that is established for social, pleasure, or recreational purposes and organized as a corporation of which the equity interests are held by the members may purchase the equity membership interest of any member, and the payment for such interest is not a distribution for purposes of this section. A corporation may pay compensation in a reasonable amount to its members, directors, or officers for services rendered, may confer benefits upon its members in conformity with its purposes, and, upon dissolution or final liquidation, may make distributions to its members as permitted by this act. If expressly permitted by its articles of incorporation, a corporation may make distributions upon partial liquidation to its members, as permitted by this section. Any such payment, benefit, or distribution does not constitute a dividend or a distribution of income or profit for purposes of this section. Any corporation which is a utility exempt from regulation under s. 367.022(7), whose articles of incorporation state that it is exempt from taxation under s. 501(c)(12) of the Internal Revenue Code, may make such refunds to its members, prior to a dissolution or liquidation, as its managing board deems necessary to establish or preserve its tax-exempt status. Any such refund does not constitute a dividend or a distribution of income or profit for purposes of this section.

(2)  Subject to subsection (1), a corporation may issue certificates in any form evidencing membership in the corporation.

(3)  Stock certificates issued under former s. 617.011(2), Florida Statutes (1989), constitute membership certificates for purposes of this act.

History.--s. 33, ch. 90-179; s. 2, ch. 96-343; s. 15, ch. 2005-267.