36 U.S.C. § 23106: Restrictions

Summary

The corporation cannot issue stock or pay dividends. It must not give money, support, or help to any political party or candidate. The income or assets of the corporation cannot go to or benefit trustees, officers, employees, board of nominations members, or members while the corporation exists or when it is dissolved, except that reasonable pay to an officer or employee is allowed if the board of trustees approves. The corporation also cannot make loans or advances to those people. Trustees or officers who approve such a loan are each legally responsible to repay the amount until it is paid back. None of the principal or interest from a fund referred to in section 23102(1) may be given to an organization if much of that organization’s work is propaganda or trying to influence legislation, or if any of its net earnings benefit a private person or shareholder.

Title 36, §23106

Patriotic and National Observances, Source: USLM XML via OLRC

(a)Stock and Dividends.—

The corporation may not issue stock or declare or pay a dividend.

(b)Political Activities.—

The corporation or a trustee, officer, employee, member of the board of nominations, or member of the corporation as such may not contribute to, support, or assist a political party or candidate for public office.

(c)Distribution of Income or Assets.—

The income or assets of the corporation may not inure to the benefit of, or be distributed to, a trustee, officer, member of the board of nominations, or member of the corporation, as such, during the life of the corporation or on its dissolution or final liquidation. This subsection does not prevent the payment of reasonable compensation to an officer or employee in an amount approved by the board of trustees.

(d)Loans.—

The corporation may not make a loan or advance to a trustee, officer, employee, member of the board of nominations, or member of the corporation. Trustees who vote for or assent to making such a loan or advance, and officers who participate in making the loan or advance, are jointly and severally liable to the corporation for the amount of the loan or advance until it is repaid.

(e)Contributions to Certain Organizations.—

None of the principal or interest of a fund referred to in section 23102(1) of this title may be contributed to an organization if—

(1)a substantial part of its activities is carrying on propaganda or attempting to influence legislation; or

(2)any part of its net earnings benefits a private shareholder or individual.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 23106(a)36:4313.July 14, 1964, Pub. L. 88–372, §§ 3(1) (1st sentence words after 8th comma), 10, 11, 13, 78 Stat. 314, 317. 23106(b)36:4311. 23106(c)36:4310(a). 23106(d)36:4310(b). 23106(e)36:4303(1) (1st sentence words after 8th comma). In subsection (a), the words “any shares of” are omitted as unnecessary. In subsection (c), the words “inure to the benefit of” are substituted for “inure to” for consistency in the revised title. In subsection (d), the words “or advance” are added in 2 places for consistency in the subsection.

§23106 Restrictions

Summary

Title 36, §23106

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata