ARTICLE 1. Limitations [12450. - 12454.5.]

Cal. Corporations Code - CORP 1.

in effect

Cal. Corporations Code - CORP § 12450. Section 12450.

This chapter does not apply to any proceeding for winding up and dissolution of corporations under Chapters 15 (commencing with Section 12620), 16 (commencing with Section 12630), and 17 (commencing with Section 12650).

Cal. Corporations Code - CORP § 12451. Section 12451.

Distributions (Section 12235) in any fiscal year shall not exceed 15 percent, multiplied by contributions (whether by membership fees, capital credits, or otherwise) to capital.

Cal. Corporations Code - CORP § 12452. Section 12452.

A corporation may, subject to meeting the requirements of Section 12453 and any additional restrictions authorized by Section 12454, purchase or redeem memberships.

Cal. Corporations Code - CORP § 12453. Section 12453.

Neither a corporation nor any of its subsidiaries shall purchase or redeem memberships, or make a patronage distribution to members out of earnings of the corporation on nonmember patronage, or make a distribution, if the corporation or the subsidiary purchasing or redeeming memberships or 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.

Cal. Corporations Code - CORP § 12454. Section 12454.

Nothing in this chapter prohibits additional restrictions upon the purchase or redemption of a membership, upon distributions, or upon patronage distributions, by provision in a corporation’s articles or bylaws or agreement entered into by the corporation.

Cal. Corporations Code - CORP § 12454.5. Section 12454.5.

(a) A worker cooperative may create an indivisible reserves account that shall not be distributed to members. (b) Funds in the indivisible reserves account shall only derive from non-patronage-sourced income, in a manner provided in the articles or bylaws, or by the board, and shall be used as capital for the cooperative.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026