AZ LAW BOOK

C. A corporation may make distributions to members who are domestic or foreign nonprofit corporations if after the distribution is made both: 1. The corporation would be able to pay its debts as the debts become due in the usual course of its activities. 2. The corporation's total assets would at least equal the sum of its total liabilities. Title 10, Chapter 37 DISSOLUTION-NONPROFIT CORPORATIONS Article 1 Voluntary Dissolution 10-11401. Dissolution by incorporators or directors and third persons A. A majority of the incorporators or initial directors of a corporation that has not commenced activities or the board of directors of a corporation that has no members or has no members entitled to vote on dissolution or that has not commenced activities may dissolve the corporation by delivering to the commission for filing articles of dissolution. An incorporator or a director, whose signature shall be acknowledged, shall execute the articles of dissolution, and the articles shall set forth all of the following: 4. That the dissolution was duly authorized by act of the board of directors or a majority of the incorporators or initial directors and, if required by section 10-11030, act of any other persons. B. The board of directors, incorporators or initial directors in approving the dissolution shall adopt a plan of dissolution indicating to whom the assets owned or held by the corporation will be distributed after all creditors have been paid. C. Authorization of dissolution pursuant to this section shall require the approval in writing by any person or persons whose approval is required for dissolution. 10-11402. Dissolution by directors and third persons A. If the members of the corporation are entitled to vote on dissolution, a corporation's board of directors may propose dissolution for submission to the members. B. For a proposal to dissolve to be adopted all of the following shall have occurred: 1. The board of directors shall recommend dissolution to the members, unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the members. 2. The members entitled to vote shall approve the proposal to dissolve as provided in subsection E or F of this section. 3. Each person whose approval is required by the articles of incorporation for dissolution shall approve the plan in writing. C. The board of directors may condition its submission of the proposal for dissolution on any basis. D. The corporation shall notify each member of the proposed membership meeting in accordance with section 10-3705. The notice shall also state that the purpose or one of the purposes of the meeting is to consider dissolving the corporation and shall contain or be accompanied by a copy or summary of the plan of dissolution. E. Unless the articles of incorporation or the board of directors acting pursuant to subsection C of this section requires a greater vote or voting by class, in order to adopt the proposal to dissolve a majority of the votes cast or a majority of the voting power, whichever is less, shall approve the proposal to dissolve. F. If the board of directors submits the dissolution for member action by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan of dissolution. G. The plan of dissolution shall indicate to whom the assets owned or held by the corporation will be distributed after all creditors have been paid. 1. The name of the corporation. 2. The date of its incorporation. 3. Either: (a) That the corporation has no members. (b) That the corporation has no members entitled to vote on dissolution. (c) That the corporation has not commenced activities.

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Law Book Revised 11.02.2017