516. Distributions to members upon termination of membership.(a) Except as provided in this chapter or the certificate of incorporation or the by-laws, the interest of a member in the property of a corporation shall terminate upon the termination of his membership, whether by expiration of the term of membership, or by the death, voluntary withdrawal, or expulsion of the member, or otherwise. Such termination shall be without prejudice to his rights, if any, as holder of a capital or subvention certificate.
(b) In the event of a termination of membership, whether voluntary or involuntary, and subject to any restrictions contained in this chapter or the certificate of incorporation or the by-laws, a corporation may at its option thereafter call for redemption any capital certificate or certificates held by such former member, and redeem the same upon payment of a sum of money equal to the redemption price thereof if such certificates are by their terms redeemable, or upon payment of a sum of money equal to the amount of the capital contribution evidenced by such certificates if they are not by their express terms redeemable.
(c) If a member who would upon dissolution of the corporation have distributive rights in its assets under paragraph (d) of section 507 (Fees, dues and assessments; fines and penalties) is expelled other than for cause pursuant to a provision of the certificate of incorporation or by-laws authorizing such expulsion, and the corporation is dissolved within a period of five years after the date of such expulsion, the expelled member shall be entitled to share in the distribution of assets in the same manner as other members of the same class entitled to share at that time, except that his share shall be charged with any arrearages and all dues and assessments which he would have paid if he had remained a member, plus interest on all such items.
(d) Nothing in this section shall authorize a corporation to make a distribution of cash or property to a former member in contravention of the provisions of section 515 (Dividends prohibited; certain distributions of cash or property authorized).
Last modified: February 3, 2019