(805 ILCS 105/109.10) (from Ch. 32, par. 109.10)
Sec. 109.10.
Distributions prior to dissolution.
(a)
The board of directors of a corporation may authorize, and
the corporation may make, distributions of its money,
property, or other assets, other than upon dissolution and
final liquidation, subject to the limitations of subsection
(d) of this Section, only:
(1) To any person or organization who or which has
made payments to the corporation for goods or services, as a
fractional repayment of such payments, provided all such
persons or organizations in any category are repaid on an
equal pro rata basis; or
(2) To any person or organization as a repayment of
his, her or its contribution of an amount not to exceed the
amount of the
contribution, provided that any assets held for any charitable,
religious, eleemosynary, benevolent, educational or similar purpose or held
upon a condition requiring return, shall continue to be so restricted.
The articles of incorporation
or the bylaws may provide that the membership rights of a
member cease upon the repayment, in whole, of the
contribution of such member.
(b) Any payment or transfer of money, property or other
assets in furtherance of any of the purposes of the
corporation shall not be deemed a distribution for the
purposes of this Article and this Section shall not be
construed as limiting the purposes and powers of a
corporation as set forth in Article 3 of this Act.
(c) All distributions by a corporation permitted by this
Section shall be at the option of the corporation only and
at such amount or amounts, within the period or periods, and
on such terms and conditions, not inconsistent with the
purpose of the corporation and this Act, as are stated in,
or fixed by the board of directors pursuant to authority
granted by, the articles of incorporation or the bylaws.
(d) No distribution under subsection (a) may be made if,
after giving it effect:
(1) The corporation would be insolvent; or
(2) The net assets of the corporation would be less
than zero; or
(3) The corporation would be rendered unable to carry
on its corporate purposes.
(e) The board of directors may base a determination that a
distribution may be made under subsection (d) either 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.
(f) The effect of a distribution under subsection (d) is
measured as of the earlier of:
(1) The date of its authorization if payment occurs
within 120 days after the date of authorization or the date
of payment if payment occurs more than 120
days after the date of authorization; or
(2) In the case of a repayment of a contribution in
which the membership rights of a member cease, the earlier
of (i) the date money or other property is transferred or
debt incurred by the corporation or (ii) the date the
membership rights of the member cease.
(Source: P.A. 84-1423.)
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