§ 5542. Subventions.

620 words·~3 min read·/pa/title-15/chapter-55/5542

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(a)General rule.-- The bylaws of a nonprofit corporation may provide that the corporation shall be authorized by resolution of the board of directors or other body to accept subventions from members or nonmembers on terms and conditions not inconsistent with this subpart. The resolution of the board or other body may provide that the maker of a subvention shall be entitled to a fixed or contingent periodic payment out of the corporate assets equal to a percentage of the original amount or value of the subvention. The rights of makers of subventions shall at all times be subordinate to the rights of creditors of the corporation.

(b)Consideration receivable.-- Consideration for subventions, unless otherwise provided in the bylaws:

(1)May consist of money, obligations (including an obligation of a subventor), services performed whether or not contracted for, contracts for services to be performed, memberships in or securities or obligations of the corporation or any other tangible or intangible property or benefit to the corporation. If subventions are issued for other than money, the value of the consideration shall be determined by or in the manner provided by the board of directors or other body.

(2)Shall be provided or paid to or as ordered by the corporation.

(c)Form of certificate.-- (Deleted by amendment).

(c.1) Form of subventions.-- Subventions shall be represented by certificates or shall be uncertificated subventions. Each subvention certificate shall be executed by or on behalf of the corporation issuing the subvention in the manner it may determine. The fact that the corporation is a nonprofit corporation shall be noted conspicuously on the face or back of each certificate.

(d)Transferability of subvention.-- Subventions shall be nontransferable unless the resolution of the board of directors or other body provides that they shall be transferable either at will or subject to specified restrictions.

(e)Redemption at option of corporation.-- The resolution of the board of directors or other body may provide that a subvention shall be redeemable, in whole or in part, at the option of the corporation at the price or prices (not to exceed the original amount or value of the subvention plus any periodic payments due or accrued thereon), within the period or periods, and on the terms and conditions, not inconsistent with this subpart, as are stated in the resolution.

(f)Redemption at option of holders.-- The resolution of the board of directors or other body may provide that makers or holders of all or some subventions shall have the right to require the corporation after a specified period of time to redeem the subventions, in whole or in part, at a price or prices that do not exceed the original amount or value of the subvention plus any periodic payments due or accrued on the subvention, upon an affirmative showing that the financial condition of the corporation will permit the required payment to be made without impairment of its operations or injury to its creditors. The right to require redemption may in addition be conditioned upon the occurrence of a specified event. For the purpose of enforcing their rights under this subsection, makers or holders of subventions shall be entitled to inspect the books and records of the corporation.

(g)Rights of makers or holders on dissolution.-- Makers or holders of subventions, upon dissolution of the corporation, shall be entitled, after the claims of creditors have been satisfied, to repayment of the original amount or value of the subvention plus any periodic payments due or accrued on the subvention, unless a lesser sum is specified in the resolution of the board of directors or other body concerning the subvention.

15c5542v

(July 9, 2013, P.L.476, No.67, eff. 60 days)

15c5543s