Nonprofit Mutual Benefit Corp. Law › CHAPTER 4. Distributions [7410 - 7420] › ARTICLE 1. Limitations [7410 - 7414]

(Added by Stats. 1978, Ch. 567.)
Text current as of August 17, 2026, per California Legislative Information.

Neither a corporation nor any of its subsidiaries shall make a distribution if the corporation or the subsidiary making the distribution is, or as a result thereof would be, likely to be unable to meet its liabilities (except those whose payment is otherwise adequately provided for) as they mature.

The text of the Nonprofit Mutual Benefit Corporation Law is provided for reference and convenience only, from the California Legislative Information website (leginfo.legislature.ca.gov). It is not legal advice, and the official version of California statutes is published by the state. Statutes may have been amended after the “current as of” date shown above. Consult counsel regarding the application of any statute to your association.