15 Pa.C.S. Ch. 55

15 Pa.C.S. Ch. 55
in effect

15 Pa.C.S. § 55 Publication of notice.

When the Department of State is ready to provide expedited services under the addition of 15 Pa.C.S. § 153(a)(16), it shall transmit notice of that fact to the Legislative Reference Bureau for publication as a notice in the Pennsylvania Bulletin. Explanatory Note. Act 67 amended, reenacted, added, deleted or repealed sections 102, 107, 111, 131, 133, 134, 135, 136, 152, 153, 155, 156, 1103, 1104, 1306, 1504, 1523, 1527, 1528, 1529, 1552, 1575, 1704, 1705, 1727, 1756, 1759, 1764, 1766, 1906, 1907, 1908, 1911, 1913, 1922, 1923, 1931, 1957, 1973, 1978, 2522, 2528, 2529, 2545, 3133, 3135, 3322, 3325, 3331, 4127, 5103, 5104, 5105, 5106, 5107, 5108, 5109, 5302, 5306, 5307, 5308, 5309, 5310, 5331, 5501, 5504, 5509, 5511, 5541, 5542, 5543, 5544, 5546, 5547, 5548, 5550, 5551, 5552, 5553, 5554, 5585, 5586, 5587, 5588, 5589, 5702, 5704, 5705, 5708, 5722, 5723, 5724, 5725, 5726, 5727, 5728, 5729, 5730, 5731, 5733, 5746, 5751, 5752, 5753, 5754, 5755, 5756, 5757, 5759, 5760, 5761, 5762, 5763, 5764, 5765, 5766, 5767, 5768, 5769, 5770, 5791, 5792, 5793, 5911, 5913, 5914, 5921, 5923, 5924, 5925, 5926, 5928, 5930, 5951, 5956, 5957, 5972, 5973, 5975, 5976, 5977, 5978, 5979, 5980, 5981, 5982, 5983, 5984, 5986, 5987, 5988, 5992, 5997, 6101, 6102, 6103, 6104, 6122, 6123, 6141, 6142, 6143, 6145, 8911 and 8925, the heading of Chapter 91 and sections 9101, 9102, 9103, 9111, 9112, 9113, 9114, 9115, 9116, 9117, 9118, 9119, 9120, 9121, 9122, 9123, 9124, 9125, 9126, 9127, 9128, 9129, 9130, 9131, 9132, 9133, 9134, 9135, 9136 and 9503 of Title 15 and sections 101 and 501 of Title 54.

15 Pa.C.S. § 5501 Corporate capacity.

Except as provided in section 103 (relating to subordination of title to regulatory laws), a nonprofit corporation shall have the legal capacity of natural persons to act. (July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5502 General powers.

(a) General rule.--Subject to the limitations and restrictions imposed by statute and, except as otherwise provided in paragraph (4), subject to the limitations and restrictions contained in its articles, every nonprofit corporation shall have power: (1) To have perpetual succession by its corporate name unless a limited period of duration is specified in its articles, subject to the power of the Attorney General under section 503 (relating to actions to revoke corporate franchises) and to the power of the General Assembly under the Constitution of Pennsylvania. (2) To sue and be sued, complain and defend and participate as a party or otherwise in any judicial, administrative, arbitrative or other proceeding in its corporate name. (3) To have a corporate seal, which may be altered at pleasure, and to use the seal by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. (4) To acquire, own and utilize any real or personal property, or any interest therein, wherever situated, regardless of any limitation set forth in its articles prior to January 1, 1972 as to the quantity or value of real or personal property which it may hold, or as to the amount of income derived therefrom. (5) To sell, convey, mortgage, pledge, lease, exchange or otherwise dispose of all or any part of its property and assets, or any interest therein, wherever situated. (6) To guarantee, become surety for, acquire, own and dispose of obligations, capital stock and other securities. (7) To borrow money, issue or incur its obligations and secure any of its obligations by mortgage on or pledge of or security interest in all or any part of its property and assets, wherever situated, franchises or income, or any interest therein. (8) To invest its funds, lend money and take and hold real and personal property as security for the repayment of funds so invested or loaned. (9) To make contributions and donations. (10) To use abbreviations, words, logos or symbols upon the records of the corporation, and in connection with the registration of, and inscription of ownership or entitlement on, certificates evidencing membership in or securities or obligations of the corporation, and upon checks, proxies, notices and other instruments and documents relating to the foregoing, which abbreviations, words, logos or symbols shall have the same force and effect as though the respective words and phrases for which they stand were set forth in full for the purposes of all statutes of this Commonwealth and all other purposes. (11) To be a promoter, partner, member, associate or manager of any partnership, enterprise or venture or in any transaction, undertaking or arrangement that the corporation would have power to conduct itself, whether or not its participation involves sharing or delegation of control with or to others. (12) To transact any lawful business that the board of directors or other body finds will aid governmental policy. (13) To continue the salaries of such of its employees as may be serving in the active or reserve armed forces of the United States, or in the national guard or in any other organization established for the protection of the lives and property of citizens of this Commonwealth or the United States, during the term of that service or during such part thereof as the employees, by reason of that service, may be unable to perform their duties as employees of the corporation. (14) To pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, incentive and deferred compensation plans and other plans or trusts for any or all of its present or former representatives and, after their death, to grant allowances or pensions to their dependents or beneficiaries, whether or not the grant was made during their lifetime. (15) To conduct its business, carry on its operations, have offices and exercise the powers granted by this article or any other provision of law in any jurisdiction within or without the United States. (16) To elect or appoint and remove officers, employees and agents of the corporation, define their duties, fix their reasonable compensation and the reasonable compensation of directors, to lend any of the foregoing money and credit and to pay bonuses or other additional compensation to any of the foregoing for past services. (17) To enter into any obligation appropriate for the transaction of its affairs, including contracts or other agreements with its members. (18) To have and exercise all of the powers and means appropriate to effect the purpose or purposes for which the corporation is incorporated. (19) To have and exercise all other powers enumerated elsewhere in this subpart or otherwise vested by law in the corporation. (b) Enumeration unnecessary.--It shall not be necessary to set forth in the articles of the corporation the powers enumerated in subsection (a). (c) Board to exercise.--See section 5721 (relating to board of directors). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 19, 1990, P.L.834, No.198, eff. imd.) 1990 Amendment. Act 198 reenacted and amended the entire section. Cross References. Section 5502 is referred to in sections 5715, 5721, 7321, 7521 of this title.

15 Pa.C.S. § 5503 Defense of ultra vires.

(a) General rule.--A limitation upon the business, purposes or powers of a nonprofit corporation, expressed or implied in its articles or bylaws or implied by law, shall not be asserted in order to defend any action at law or in equity between the corporation and a third person, or between a member and a third person, involving any contract to which the corporation is a party or any right of property or any alleged liability of whatever nature, but the limitation may be asserted: (1) In an action by a member against the corporation to enjoin the doing of unauthorized acts or the transaction or continuation of unauthorized business. If the unauthorized acts or business sought to be enjoined are being transacted pursuant to any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the action and if it deems the result to be equitable, set aside and enjoin the performance of the contract, and in so doing shall allow to the corporation, or to the other parties to the contract, as the case may be, such compensation as may be appropriate for the loss or damage sustained by any of them from the action of the court in setting aside and enjoining the performance of the contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained. (2) In any action by or in the right of the corporation to procure a judgment in its favor against an incumbent or former officer, director or member of an other body of the corporation for loss or damage due to his unauthorized acts. (3) In a proceeding by the Commonwealth under section 503 (relating to actions to revoke corporate franchises) or in a proceeding by the Commonwealth to enjoin the corporation from the doing of unauthorized or unlawful business. (b) Conveyances of property by or to a corporation.--A conveyance or transfer by or to a nonprofit corporation of property, real or personal, of any kind or description, shall not be invalid or fail because in making the conveyance or transfer, or in acquiring the property, real or personal, any representative of the corporation acting within the scope of the actual or apparent authority given to him by the corporation has exceeded any of the purposes or powers of the corporation. (c) Cross reference.--See section 6146 (relating to provisions applicable to all foreign corporations). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; June 22, 2001, P.L.418, No.34, eff. 60 days) Cross References. Section 5503 is referred to in section 6146 of this title.

15 Pa.C.S. § 5504 Adoption, amendment and contents of bylaws.

(a) General rule.--The members entitled to vote shall have the power to adopt, amend and repeal the bylaws of a nonprofit corporation. Except as provided in subsection (b), the authority to adopt, amend and repeal bylaws may be expressly vested by the bylaws in the board of directors or other body, subject to the power of the members to change such action. The bylaws may contain any provisions for managing the business and regulating the affairs of the corporation not inconsistent with law or the articles. In the case of a meeting of members, written notice shall be given to each member entitled to vote that the purpose, or one of the purposes, of a meeting is to consider the adoption, amendment or repeal of the bylaws. There shall be included in or enclosed with the notice a copy of the proposed amendment or a summary of the changes to be effected thereby. Any change in the bylaws shall take effect when adopted unless otherwise provided in the resolution effecting the change. (b) Exception.--Except as provided in section 5310(a) (relating to organization meeting), the board of directors or other body shall not have the authority to adopt or change a bylaw on any subject that is committed expressly to the members by any of the provisions of this subpart. See: Subsection (d) (relating to amendment of voting provisions). Section 5713 (relating to personal liability of directors). Section 5721 (relating to board of directors). Section 5725(b) (relating to selection of directors). Section 5726(a) (relating to removal of directors by the members). Section 5726(b) (relating to removal of directors by the board). Section 5729 (relating to voting rights of directors). Section 5751(a) (relating to classes and qualifications of membership). Section 5752(c) (relating to rights of shareholders). Section 5754(a) (relating to members grouped in local units). Section 5755(a) (relating to regular meetings). Section 5756 (relating to quorum). Section 5757 (relating to action by members). Section 5758 (relating to voting rights of members). Section 5759(a) (relating to voting and other action by proxy). Section 5762(a) (relating to voting by corporations). Section 5765 (relating to judges of election). Section 5769(a) (relating to termination and transfer of membership). Section 5770 (relating to voting powers and other rights of certain securityholders and other entities). Section 5975(c) (relating to predissolution provision for liabilities). (b.1) Restated bylaws.--Subsection (b) does not prohibit the board of directors from including in restated bylaws, without substantive change, a bylaw adopted by the members, and such a restated provision continues to have the status of a bylaw adopted by the members. (c) Relationship of articles and bylaws.--Where any provision of this subpart or any other provision of law refers to a rule as set forth in the bylaws of a corporation or in a bylaw adopted by the members, the reference shall be construed to include and be satisfied by any rule on the same subject as set forth in the articles of the corporation. Where any provision of this subpart or any other provision of law refers to a rule as set forth in the articles of a corporation or prohibits the articles from setting forth a rule, the contemplated rule may not be included in a bylaw or a bylaw adopted by the members. (d) Amendment of voting provisions.-- (1) Unless otherwise restricted in a bylaw adopted by the members, whenever the bylaws require for the taking of any action by the members or a class of members a specific number or percentage of votes, the provision of the bylaws setting forth that requirement shall not be amended or repealed by any lesser number or percentage of votes of the members or of the class of members. (2) Paragraph (1) shall not apply to a bylaw setting forth the right of members to act by unanimous written consent as provided in section 5766(a) (relating to consent of members in lieu of meeting). (e) Cross reference.--See section 6145 (relating to applicability of certain safeguards to foreign domiciliary corporations). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 19, 1990, P.L.834, No.198, eff. imd.; July 9, 2013, P.L.476, No.67, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (c) and added subsec. (b.1). 2013 Amendment. Act 67 amended subsecs. (b), (c) and (d) and added subsec. (e). 1990 Amendment. Act 198 reenacted and amended the entire section. Cross References. Section 5504 is referred to in sections 5103, 5757, 6145 of this title.

15 Pa.C.S. § 5505 Persons bound by bylaws.

Except as otherwise provided by section 5713 (relating to personal liability of directors) or any similar provision of law, the bylaws of a nonprofit corporation are binding on the members, directors, members of an other body and officers of the corporation with respect to its internal affairs whether or not a member, director, member of an other body or officer has actual knowledge of the provisions of the bylaws, but a bylaw shall not affect contracts or other dealings with other persons, unless those persons have actual knowledge of the bylaw. (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

15 Pa.C.S. § 5506 Form of execution of instruments.

(a) General rule.--Any form of execution provided in the articles or bylaws to the contrary notwithstanding, any note, mortgage, evidence of indebtedness, contract or other document, or any assignment or endorsement thereof, executed or entered into between any nonprofit corporation and any other person, when signed by one or more officers or agents having actual or apparent authority to sign it, or by the president or vice-president and secretary or assistant secretary or treasurer or assistant treasurer of the corporation, shall be held to have been properly executed for and in behalf of the corporation. (b) Seal unnecessary.--The affixation of the corporate seal shall not be necessary to the valid execution, assignment or endorsement by a corporation of any instrument or other document. (c) Cross reference.--See section 6146 (relating to provisions applicable to all foreign corporations). (June 22, 2001, P.L.418, No.34, eff. 60 days) Cross References. Section 5506 is referred to in section 6146 of this title.

15 Pa.C.S. § 5507 Registered office.

(a) General rule.--Every nonprofit corporation shall have and continuously maintain in this Commonwealth a registered office which may, but need not, be the same as its place of business. (b) Statement of change of registered office.--After incorporation, a change of the location of the registered office may be authorized at any time by the board of directors or other body. Before the change of location becomes effective, the corporation shall include the change in an annual report under section 146 (relating to annual report), amend its articles under the provisions of this subpart to reflect the change or deliver to the Department of State for filing a statement of change of registered office executed by the corporation, setting forth: (1) The name of the corporation. (2) The address, including street number, if any, of its then registered office. (3) The address, including street number, if any, to which the registered office is to be changed. (4) A statement that the change was authorized by the board of directors or other body. (c) Alternative procedure.--A corporation may satisfy the requirements of this subpart concerning the maintenance of a registered office in this Commonwealth by setting forth in any document filed in the department under any provision of this subpart that permits or requires the statement of the address of its then registered office, in lieu of that address, the statement authorized by section 109(a) (relating to name of commercial registered office provider in lieu of registered address). (d) Effect of statement.--A statement regarding the registered office of a corporation set forth in a document filed in the department pursuant to this section shall operate as an amendment of the articles. (e) Cross reference.--See section 134 (relating to docketing statement). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 19, 1990, P.L.834, No.198, eff. imd.; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (b), relettered former subsec. (d) to subsec. (e) and added present subsec. (d). 1990 Amendment. Act 198 reenacted and amended the entire section. Cross References. Section 5507 is referred to in section 5103 of this title.

15 Pa.C.S. § 5508 Corporate records; inspection by members.

(a) Required records.--Every nonprofit corporation shall keep minutes of the proceedings of the incorporators, members, the directors and any other body, and a membership register. The corporation shall also keep appropriate, complete and accurate books or records of account. (1) (Deleted by amendment). (2) (Deleted by amendment). (3) (Deleted by amendment). (b) Right of inspection by a member.--On demand, in compliance with the requirements in subsection (b.1), a member has the right to examine, in person or by agent or attorney, during the usual hours for business for any proper purpose, the membership register, books and records of account, and minutes of, and consents in lieu of meetings by, the incorporators, members, directors and any other body, and to make copies or extracts therefrom. (b.1) Contents and delivery of demand.--All of the following apply to a demand under subsection (b): (1) A proper purpose shall mean a purpose reasonably related to the interest of the person as a member. (2) In every instance where an attorney or other agent is the person who seeks the right of inspection, the demand shall be accompanied by a verified power of attorney or other record that authorizes the attorney or other agent to so act on behalf of the member. (3) The demand must be: (i) made in good faith; (ii) in record form; and (iii) verified. (4) The demand must describe with reasonable particularity: (i) the purpose of the member; and (ii) the records the member desires to inspect and how the records relate to the purpose of the member. (5) The demand must be delivered to the corporation: (i) at its registered office in this Commonwealth; (ii) at its principal place of business wherever situated; (iii) in care of the person in charge of an actual business office of the corporation; or (iv) in care of the secretary of the corporation at the most recent address of the secretary shown in the records of the department. (c) Proceedings for the enforcement of inspection by a member.--If the corporation, or an officer or agent thereof, refuses to permit an inspection sought by a member or attorney or other agent acting for the member pursuant to subsection (b) or does not reply to the demand within five business days after the demand has been received, the member may file an action in the court for an order to compel the inspection. The court is hereby vested with exclusive jurisdiction to determine whether or not the person seeking inspection is entitled to the inspection sought. The court may summarily order the corporation to permit the member to inspect the membership register and the other books and records of the corporation and to make copies or extracts therefrom; or the court may order the corporation to furnish to the member a list of its members as of a specific date on condition that the member first pay to the corporation the reasonable cost of obtaining and furnishing the list and on such other conditions as the court deems appropriate. Where the member seeks to inspect the books and records of the corporation, other than its membership register or list of members, the member shall first establish: (1) that the member has complied with the provisions of this section respecting the form and manner of making demand for inspection of such document; and (2) that the inspection the member seeks is for a proper purpose. (d) Burden of proof.--Where the member seeks to inspect the membership register or list of members of the corporation and the member has complied with the provisions of this section respecting the form and manner of making demand for inspection of the documents, the burden of proof shall be upon the corporation to establish that the inspection he seeks is for an improper purpose. (e) Available relief.--The court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other or further relief as the court deems just and proper. The court may order books, documents and records, pertinent extracts therefrom, or duly authenticated copies thereof, to be brought into this Commonwealth and kept in this Commonwealth upon such terms and conditions as the order may prescribe. (f) Right to bylaws.--Every member shall have the right to receive, promptly after demand and without charge, a copy in record form of the currently effective text of the bylaws. If the corporation does not provide a member with a copy of the bylaws as required by this subsection, the member may apply to the court for an order to compel the production. The court shall summarily order the corporation to provide a copy of the bylaws unless the corporation establishes that the person seeking the bylaws is not a member. (g) Reasonable restrictions permitted.--The corporation may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction, condition or obligation under this subsection, the corporation has the burden of proving reasonableness. (h) Cross references.--See sections 107 (relating to form of records) and 5512 (relating to informational rights of a director) and 42 Pa.C.S. § 2503(7) and (9) (relating to right of participants to receive counsel fees). (June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) Cross References. Section 5508 is referred to in sections 5512, 6145 of this title.

15 Pa.C.S. § 5509 Bylaws and other powers in emergency.

(a) General rule.--Except as otherwise restricted in the bylaws, the board of directors or other body of any nonprofit corporation may adopt emergency bylaws, subject to repeal or change by action of the members, which shall, notwithstanding any different provisions of law or of the articles or bylaws, be effective during an emergency. The emergency bylaws may make any provision that may be appropriate for the circumstances of the emergency, including: (1) Procedures for calling meetings of delegates, the board or an other body. (2) Quorum requirements for meetings of delegates, the board or an other body. (3) Procedures for designating additional or substitute directors or members of an other body. (b) Lines of succession; head office.--The board of directors or other body, or the officers, if authorized by the board of directors or other body, either before or during any emergency, may: (1) provide, and from time to time modify, lines of succession in the event that during the emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties; and (2) effective in the emergency, change the head offices or designate several alternative head offices or regional offices of the corporation. (c) Representatives not liable.--A representative of the corporation: (1) Acting in accordance with any emergency bylaws in effect at the time or otherwise in accordance with this section is not liable for monetary damages except for: (i) self-dealing, willful misconduct or recklessness; (ii) violation of a criminal statute; or (iii) payment of taxes pursuant to Federal, State or local law. (2) Is not liable for any action taken by the representative in good faith in an emergency in furtherance of the ordinary business affairs of the corporation even though not authorized by the emergency or other bylaws then in effect. (d) Effect on regular bylaws.--To the extent not inconsistent with any emergency bylaws, the bylaws of the corporation shall remain in effect during any emergency, and, upon its termination, the emergency bylaws shall cease to be effective. (e) Procedure in absence of emergency bylaws.--Unless otherwise provided in emergency bylaws, notice of any meeting of delegates, the board of directors or an other body during an emergency shall be given only to those delegates, directors or members of an other body it is feasible to reach at the time and by such means as are feasible at the time, including publication, radio or television. To the extent required to constitute a quorum at any meeting of the board of directors or an other body during any emergency, the officers of the corporation who are present at the meeting shall, unless otherwise provided in emergency bylaws, be deemed, in order of rank and within the same rank in order of seniority, directors or members of the other body, as the case may be, for the meeting. An officer serving as a director or member of an other body under this subsection shall be subject to, and entitled to the benefits of the provisions of this subpart relating to directors or members of an other body. (f) Corporate actions.--A corporate action to further the ordinary business affairs of the corporation that is taken in good faith in accordance with any emergency bylaws in effect at the time or otherwise in accordance with this section is valid and binding on the corporation. (g) Member meetings.--The required time for holding the annual meeting of delegates or members of a corporation provided in section 5755(a) (relating to time of holding meetings of members) or the articles or bylaws is tolled during an emergency. The board or other body, acting by a majority of the directors or members of the other body that can be assembled, may take any action during an emergency that the board or other body determines to be practical and necessary to address the circumstances of the emergency with respect to a meeting of members notwithstanding anything to the contrary in this subpart or in the articles or bylaws. The actions the board or other body may take include postponing the meeting to a later time or date, with the record date for determining the members entitled to notice of, and to vote at, the meeting applying to the postponed meeting without regard to section 5763 (relating to determination of members of record). (h) Definition.--As used in this section, and for no other purpose, "emergency" means a period during which a quorum of the board or an other body cannot readily be assembled as a result of: (1) an attack on the United States; (2) a nuclear disaster; (3) an epidemic or pandemic; (4) a state of emergency under Federal or State law covering a geographic area in which the corporation has its principal office or a significant regional office or operation; or (5) any other catastrophe or disaster. (July 9, 2013, P.L.476, No.67, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

15 Pa.C.S. § 5510 Certain specifically authorized debt terms.

(a) Interest rates.--A nonprofit corporation shall not plead or set up usury, or the taking of more than the lawful rate of interest, or the taking of any finance, service or default charge in excess of any maximum rate therefor provided or prescribed by law, as a defense to any action or proceeding brought against it to recover damages on, or to enforce payment of, or to enforce any other remedy on, any obligation executed or effected by the corporation. (b) Yield maintenance premiums.--A prepayment premium determined by reference to the approximate spread between the yield at issuance, or at the date of amendment of any of the terms, of an obligation of a corporation and the yield at or about such date of an interest rate index of independent significance and contingent upon a change in the ownership of or memberships in the corporation or a default by or other change in the condition or prospects of the corporation or any affiliate of the corporation shall be deemed liquidated damages and shall not constitute a penalty. (c) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Affiliate." An affiliate or associate as defined in section 102 (relating to definitions). "Obligation." Includes an installment sale contract. (d) Cross reference.--See section 6146 (relating to provisions applicable to all foreign corporations). (June 22, 2001, P.L.418, No.34, eff. 60 days; July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (c). Cross References. Section 5510 is referred to in section 6146 of this title.

15 Pa.C.S. § 5511 Establishment of subordinate units.

A nonprofit corporation may establish and terminate local branches, chapters, councils, clubs, churches, lodges, parishes or other subordinate units regardless of their designation, form of government, incorporated or unincorporated status or relationship to the corporation or other supervising and controlling organization of which the corporation is a member or with which it is in allegiance and to which it is subordinate. (July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 reenacted section 5511.

15 Pa.C.S. § 5512 Informational rights of a director.

(a) General rule.--To the extent reasonably related to the performance of the duties of the director, including those arising from service as a member of a committee of the board of directors, a director of a nonprofit corporation is entitled: (1) in person or by any attorney or other agent, at any reasonable time, to inspect and copy corporate books, records and documents and, in addition, to inspect, and receive information regarding, the assets, liabilities and operations of the corporation and any subsidiaries of the corporation incorporated or otherwise organized or created under the laws of this Commonwealth that are controlled directly or indirectly by the corporation; and (2) to demand that the corporation exercise whatever rights it may have to obtain information regarding any other subsidiaries of the corporation. (b) Proceedings for the enforcement of inspection by a director.--If the corporation, or an officer or agent thereof, refuses to permit an inspection or obtain or provide information sought by a director or attorney or other agent acting for the director pursuant to subsection (a) or does not reply to the request within two business days after the request has been made, the director may file an action in the court for an order to compel the inspection or the obtaining or providing of the information. The court shall summarily order the corporation to permit the requested inspection or to obtain the information unless the corporation establishes that information other than the bylaws to be obtained by the exercise of the right is not reasonably related to the performance of the duties of the director or that the director or the attorney or agent of the director is likely to use that information in a manner that would violate the duty of the director to the corporation. The order of the court may contain provisions protecting the corporation from undue burden or expense and prohibiting the director from using the information in a manner that would violate the duty of the director to the corporation. (c) Right to the bylaws.--Every director has the right to receive, on demand and without charge, a copy in record form of the currently effective text of the bylaws. (d) Reasonable restrictions permitted.--The corporation may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction, condition or obligation under this subsection, the corporation has the burden of proving reasonableness. (e) Cross references.--See sections 107 (relating to form of records), 5508 (relating to corporate records; inspection by members) and 5734 (relating to other body) and 42 Pa.C.S. § 2503(7) (relating to right of participants to receive counsel fees). (June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) Cross References. Section 5512 is referred to in section 5508 of this title.

15 Pa.C.S. § 5513 Forum selection provisions.

(a) General rule.--The bylaws may require that an internal corporate claim must be brought exclusively in a specified court or courts of this Commonwealth and, if so specified, also in other courts sitting in this Commonwealth or in any other jurisdiction with which the nonprofit corporation has a reasonable relationship. (b) Jurisdiction.--A provision of the bylaws adopted under subsection (a) shall not have the effect of conferring jurisdiction on any court or over any person or claim and shall not apply if none of the courts specified in the provision has the requisite personal and subject matter jurisdiction. If none of the courts of this Commonwealth specified in a provision adopted under subsection (a) has the requisite personal and subject matter jurisdiction and another court of this Commonwealth does have such jurisdiction, then the internal corporate claim may be brought in the court with jurisdiction, notwithstanding that it is not specified in the provision. (c) Definition.--For the purposes of this section: (1) Except as provided in paragraph (2), "internal corporate claim" means: (i) an action that is based upon an alleged violation of a duty owed to the nonprofit corporation under the laws of this Commonwealth by a current or former director, member of an other body, officer or member in that capacity; (ii) a derivative action or proceeding brought on behalf of the corporation; (iii) an action asserting a claim arising pursuant to any provision of: (A) this title; (B) the articles of incorporation or bylaws; or (C) an agreement regarding the governance of the corporation or the transfer of memberships in the corporation if: (I) the corporation and at least one member are parties to the agreement or stated or intended beneficiaries thereof; and (II) the agreement is entered into after the adoption of the forum selection provision under this section and the agreement does not contain an inconsistent forum selection provision; or (iv) any action asserting a claim regarding the internal affairs of the corporation that is not included in subparagraphs (i), (ii) and (iii). (2) An internal corporate claim does not include a claim, action or proceeding described in paragraph (1) that is subject to section 5107 (relating to subordination of subpart to canon law). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 added section 5513. Cross References. Section 5513 is referred to in section 102 of this title.

15 Pa.C.S. § 5541 Capital contributions of members.

(a) General rule.--A nonprofit corporation organized on a nonstock basis may provide in its bylaws that members, upon or subsequent to admission, shall make capital contributions. The amount shall be specified in, or fixed by the board of directors or other body pursuant to authority granted by, the bylaws. The requirement of a capital contribution may apply to all members, to the members of a single class or to members of different classes in different amounts or proportions. (b) Consideration receivable.--The capital contribution of a member, unless otherwise provided in the bylaws: (1) May consist of money, obligations (including an obligation of a member), services performed whether or not contracted for, contracts for services to be performed, memberships in or securities or obligations of the corporation or any other tangible or intangible property or benefit to the corporation. If a capital contribution is made in a form other than money, the value of the contribution shall be determined by or in the manner provided by the board of directors or other body. (2) Shall be provided or paid to or as ordered by the corporation. (c) Evidence of contribution.--The capital contribution of a member shall be recorded on the books of the corporation and may be evidenced by a written instrument delivered to the member, but the instrument shall not be denominated a "share certificate" or by any other word or term implying that the instrument is a share certificate subject to section 5752 (relating to organization on a stock share basis). (d) Transferability of interest.--Unless otherwise provided in the bylaws, the capital contribution of a member shall not be transferable. (e) Repayment of contribution.--The capital contribution of a member shall not be repaid by the corporation except upon dissolution of the corporation or as provided in this subpart. A corporation may provide in its bylaws that its capital contributions, or some of them, shall be repayable, in whole or in part, at the option of the corporation only, in the amount or amounts (not to exceed the amount of the capital contribution), within the period or periods and on the terms and conditions, not inconsistent with this subpart, as are stated in, or fixed by the board of directors or other body pursuant to authority granted by, the bylaws. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5542 Subventions.

(a) General rule.--The bylaws of a nonprofit corporation may provide that the corporation shall be authorized by resolution of the board of directors or other body to accept subventions from members or nonmembers on terms and conditions not inconsistent with this subpart. The resolution of the board or other body may provide that the maker of a subvention shall be entitled to a fixed or contingent periodic payment out of the corporate assets equal to a percentage of the original amount or value of the subvention. The rights of makers of subventions shall at all times be subordinate to the rights of creditors of the corporation. (b) Consideration receivable.--Consideration for subventions, unless otherwise provided in the bylaws: (1) May consist of money, obligations (including an obligation of a subventor), services performed whether or not contracted for, contracts for services to be performed, memberships in or securities or obligations of the corporation or any other tangible or intangible property or benefit to the corporation. If subventions are issued for other than money, the value of the consideration shall be determined by or in the manner provided by the board of directors or other body. (2) Shall be provided or paid to or as ordered by the corporation. (c) Form of certificate.--(Deleted by amendment). (c.1) Form of subventions.--Subventions shall be represented by certificates or shall be uncertificated subventions. Each subvention certificate shall be executed by or on behalf of the corporation issuing the subvention in the manner it may determine. The fact that the corporation is a nonprofit corporation shall be noted conspicuously on the face or back of each certificate. (d) Transferability of subvention.--Subventions shall be nontransferable unless the resolution of the board of directors or other body provides that they shall be transferable either at will or subject to specified restrictions. (e) Redemption at option of corporation.--The resolution of the board of directors or other body may provide that a subvention shall be redeemable, in whole or in part, at the option of the corporation at the price or prices (not to exceed the original amount or value of the subvention plus any periodic payments due or accrued thereon), within the period or periods, and on the terms and conditions, not inconsistent with this subpart, as are stated in the resolution. (f) Redemption at option of holders.--The resolution of the board of directors or other body may provide that makers or holders of all or some subventions shall have the right to require the corporation after a specified period of time to redeem the subventions, in whole or in part, at a price or prices that do not exceed the original amount or value of the subvention plus any periodic payments due or accrued on the subvention, upon an affirmative showing that the financial condition of the corporation will permit the required payment to be made without impairment of its operations or injury to its creditors. The right to require redemption may in addition be conditioned upon the occurrence of a specified event. For the purpose of enforcing their rights under this subsection, makers or holders of subventions shall be entitled to inspect the books and records of the corporation. (g) Rights of makers or holders on dissolution.--Makers or holders of subventions, upon dissolution of the corporation, shall be entitled, after the claims of creditors have been satisfied, to repayment of the original amount or value of the subvention plus any periodic payments due or accrued on the subvention, unless a lesser sum is specified in the resolution of the board of directors or other body concerning the subvention. (July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5543 Debt and security interests.

(a) General rule.--Unless otherwise provided in the bylaws, a nonprofit corporation may issue its bonds or other obligations for an amount and form of consideration as may be determined by or in the manner provided by the board of directors or other body. (b) Creation of lien on real or personal property.--The board of directors or other body may authorize any mortgage or pledge of, or the creation of a security interest in, all or any part of the real or personal property of the corporation, or any interest in the real or personal property. No application to or confirmation by a court shall be required, and, unless otherwise restricted in the bylaws, no vote or consent of the members shall be required to make effective the action by the board or other body. (July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5543.1 Usury not a defense (Repealed).

2001 Repeal. Section 5543.1 was repealed June 22, 2001, P.L.418, No.34, effective in 60 days.

15 Pa.C.S. § 5544 Dues and assessments.

(a) General rule.--A nonprofit corporation may levy dues or assessments, or both, on its members, if authority to do so is conferred by the bylaws, subject to any limitations contained in the bylaws. The dues or assessments, or both, may be imposed upon all members of the same class either alike or in different amounts or proportions, and upon a different basis upon different classes of members. Members of one or more classes may be made exempt from either dues or assessments, or both, in the manner or to the extent provided in the bylaws. (b) Amount and method of collection.--The amount of the levy and method of collection of the dues or assessments, or both, may be fixed in the bylaws, or the bylaws may authorize the board of directors or other body to fix the amount of the dues or assessments from time to time, and make them payable at the time and by the methods of collection as the board of directors or other body may prescribe. (c) Enforcement of payment.--A nonprofit corporation may make bylaws necessary to enforce the collection of dues or assessments, including provisions for the termination of membership, upon reasonable notice, for nonpayment of dues or assessments, and for reinstatement of membership. (July 9, 2013, P.L.476, No.67, eff. 60 days) Cross References. Section 5544 is referred to in section 5769 of this title.

15 Pa.C.S. § 5545 Income from corporate activities.

A nonprofit corporation whose lawful activities involve among other things the charging of fees or prices for its services or products, shall have the right to receive such income and, in so doing, may make an incidental profit. All such incidental profits shall be applied to the maintenance and operation of the lawful activities of the corporation, and in no case shall be divided or distributed in any manner whatsoever among the members, directors, or officers of the corporation. As used in this section the terms fees or prices do not include rates of contribution, fees or dues levied under an insurance certificate issued by a fraternal benefit society, so long as the distribution of profits arising from said fees or prices is limited to the purposes set forth in this section and section 5551 (relating to dividends prohibited; compensation and certain payments authorized). (July 30, 1975, P.L.128, No.63; Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989)

15 Pa.C.S. § 5546 Purchase, sale, mortgage and lease of real property.

Except as otherwise provided in this subpart and unless otherwise provided in the bylaws, no application to or confirmation of any court shall be required for the purchase by or the sale, lease or other disposition of the real or personal property, or any part of the real or personal property, of a nonprofit corporation, and, unless otherwise restricted in section 5930 (relating to voluntary transfer of corporate assets) or in the bylaws, no vote or consent of the members shall be required to make effective such action by the board or other body. If the property is subject to a trust, the conveyance away shall be free of trust, and the trust shall be impinged upon the proceeds of the conveyance. (July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5546.1 Insolvency or bankruptcy (Repealed).

2001 Repeal. Section 5546.1 was repealed June 22, 2001, P.L.418, No.34, effective in 60 days.

15 Pa.C.S. § 5547 Authority to take and hold trust property.

(a) General rule.--Every nonprofit corporation incorporated for a charitable purpose or purposes may take, receive and hold such real and personal property as may be given, devised to, or otherwise vested in such corporation, in trust, for the purpose or purposes set forth in its articles. The board of directors or other body of the corporation shall, as trustees of such property, be held to the same degree of responsibility and accountability as if not incorporated, unless a less degree or a particular degree of responsibility and accountability is prescribed in the trust instrument, or unless the board of directors or such other body remain under the control of the members of the corporation or third persons who retain the right to direct, and do direct, the actions of the board or other body as to the use of the trust property from time to time. (b) Nondiversion of certain property.--Property committed to charitable purposes shall not, by any proceeding under Chapter 3 (relating to entity transactions) or 59 (relating to amendments, sale of assets and dissolution) or otherwise, be diverted from the objects to which it was donated, granted or devised, unless and until the board of directors or other body obtains from the court an order under 20 Pa.C.S. Ch. 77 (relating to trusts) specifying the disposition of the property. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Oct. 27, 2010, P.L.837, No.85, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (b). Cross References. Section 5547 is referred to in sections 202, 5548, 5548.1, 5549, 5746, 5916, 5930, 5976, 5989 of this title.

15 Pa.C.S. § 5548 Investment of trust funds.

(a) General rule.--Unless otherwise specifically directed in the trust instrument, the board of directors or other body of a nonprofit corporation incorporated for charitable purposes shall have power to invest any assets vested in the corporation by such instrument or the proceeds thereof separately or together with other assets of the corporation, in the manner authorized for fiduciaries by 20 Pa.C.S. Ch. 72 (relating to prudent investor rule), and to retain any investments heretofore so made. Any such nonprofit corporation may, by appropriate action of its board of directors or other body, keep any investments or fractional interests in any investments, held by it or made by it, in the name of the corporation or in the name of a nominee of the corporation. (b) Use and management.--Except as otherwise permitted under 20 Pa.C.S. Ch. 77 (relating to trusts), the board of directors or other body shall apply all assets thus received to the purposes specified in the trust instrument. The directors or other body shall keep accurate accounts of all trust funds, separate and apart from the accounts of other assets of the corporation. (c) Determination of income.-- (1) Unless otherwise specifically directed in the trust instrument, the board of directors or other body may elect to be governed by this subsection with respect to assets thus received, including any participation in any common trust fund. (2) To make an election under this subsection, the board of directors or other body shall adopt and follow an investment policy seeking a total return for the assets held by the corporation or in the name of a nominee of the corporation or by an institutional trustee pursuant to section 5549 (relating to transfer of trust or other assets to institutional trustee), whether the return is to be derived from capital appreciation, earnings or distributions with respect to the capital or both. The policy constituting the election shall be in writing, shall be maintained as part of the permanent records of the corporation and shall recite that it constitutes an election to be governed by this subsection. (3) (i) If an election is made to be governed by this subsection, the term "income" shall mean a percentage of the value of the assets so held by or for the corporation. (ii) Except as otherwise provided in subparagraph (iii), the board of directors or other body shall in a writing maintained as part of the permanent records of the corporation annually select a percentage and determine that it is consistent with the long-term preservation of the real value of the assets, but in no event shall the percentage be less than 2% nor more than 7% per year. (iii) The board of directors or other governing body shall, in selecting a percentage, consider both the long-term preservation of the real value of the assets and the corporation's need for capital to fulfill its mission and may select a percentage of not more than 10% per year. This subparagraph shall only apply during calendar years 2020, 2021 and 2022, or for the corporation's fiscal years that end during those calendar years. (4) The board of directors or other body may revoke an election to be governed by this subsection if the revocation is made as part of an alternative investment policy seeking the long-term preservation of the real value of the assets thus received. The revocation and alternative investment policy shall be in writing and maintained as part of the permanent records of the corporation. (5) For purposes of applying this subsection, the value of the assets of the corporation shall be the fair market value of the assets so held by or for the corporation, determined at least annually and averaged over a period of three or more preceding years. However, if the assets have been held for less than three years, the average shall be determined over the period during which the assets have been held. (d) Scope of section.--This section shall apply to assets hereafter received pursuant to section 5547 (relating to authority to take and hold trust property), to assets heretofore so received and held at the time when this article takes effect and to reinvestments of all such assets. (e) Definition.--(Deleted by amendment). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 21, 1998, P.L.1067, No.141, eff. imd.; June 25, 1999, P.L.212, No.28, eff. 6 months; Oct. 27, 2010, P.L.837, No.85, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days; July 23, 2020, P.L.681, No.71, eff. imd.) 2020 Amendment. Act 71 amended subsec. (c). 2013 Amendment. Act 67 amended subsec. (b). 1999 Amendment. Act 28 amended subsec. (a). 1998 Amendment. Act 141 amended subsecs. (b) and (c) and deleted subsec. (e). Section 4 of Act 141 provided that the amendment of subsecs. (b), (c) and (e) shall apply to all trusts, whether created before, on or after the effective date of Act 141. 1988 Amendment. Act 177 amended subsec. (d). Cross References. Section 5548 is referred to in sections 5549, 5585 of this title.

15 Pa.C.S. § 5548.1 Nonjudicial settlement agreement.

Notwithstanding section 5547(b) (relating to authority to take and hold trust property): (1) Except as expressly provided in the gift instrument and as otherwise provided in paragraph (2), if the donor placed restrictions on the use or management of property transferred to a nonprofit corporation, the donor, together with the nonprofit corporation holding the property, may enter into a binding nonjudicial settlement agreement with respect to any matter involving the property, including a restriction. (2) A nonjudicial settlement agreement is valid only to the extent it includes terms and conditions that the court could approve under this chapter or other applicable law and that the property remains committed to a charitable purpose or purposes. (3) A nonprofit corporation may request the court to review a nonjudicial settlement agreement in order to determine whether the agreement contains terms and conditions the court could have approved. (4) A proceeding commenced to enforce a gift instrument related to assets held by a nonprofit corporation for a charitable purpose, whether or not subject to a nonjudicial settlement agreement, may be brought by the donor during the donor's lifetime or at any time by the Office of Attorney General, by a charitable organization expressly named in the gift instrument and nonjudicial settlement agreement, if applicable, to receive any portion of the assets governed by the gift instrument and nonjudicial settlement agreement, if applicable, or by any other person having standing to do so, which may include anyone appointed in the gift instrument. (July 23, 2020, P.L.681, No.71, eff. imd.) 2020 Amendment. Act 71 added section 5548.1.

15 Pa.C.S. § 5549 Transfer of trust or other assets to institutional trustee.

(a) General rule.--Any nonprofit corporation holding or receiving assets under section 5547 (relating to authority to take and hold trust property) may, by appropriate action of its board of directors or other body, transfer, which transfer may be either revocable or irrevocable, any such assets to a corporate trustee, which shall be a bank and trust company or a trust company incorporated under the laws of this Commonwealth or a national banking association having fiduciary powers and having its principal office in this Commonwealth, as trustee and with like investment restrictions. In like manner the corporation may transfer, which transfer shall be revocable, any other part of its assets to such a corporate trustee, subject to the same powers, restrictions and obligations with respect to investment as are applicable to the corporation itself. (b) Relief from liability.--Upon such transfer the board of directors or other body of the corporation shall be relieved of all liability for the administration of such assets for as long as such assets are administered by the corporate trustee. (c) Amount and frequency of payment.--Such corporate trustee shall pay, at least semi-annually or at more frequent intervals if so agreed, the net income from such assets, which income may be determined under section 5548(c) (relating to investment of trust funds) if such election is properly made by the board of directors or other body of the corporation, to the corporation for use and application to the purpose or purposes for which the assets were received by the corporation. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 21, 1998, P.L.1067, No.141, eff. imd.) 1998 Amendment. Act 141 amended subsec. (c). Section 4 of Act 141 provided that the amendment of subsec. (c) shall apply to all trusts, whether created before, on or after the effective date of Act 141. 1988 Amendment. Act 177 amended subsec. (a). Cross References. Section 5549 is referred to in sections 5548, 5585 of this title.

15 Pa.C.S. § 5550 Devises, bequests and gifts after certain fundamental changes.

A devise, bequest or gift to be effective in the future, in trust or otherwise, to or for a nonprofit corporation which has: (1) changed its purposes; (2) sold, leased away or exchanged all or substantially all its property and assets; (3) been converted into a business corporation; (4) become a party to a consolidation or a division; (5) become a party to a merger which it did not survive; or (6) been dissolved; after the execution of the document containing the devise, bequest or gift and before the nonprofit corporation acquires a vested interest in the devise, bequest or gift shall be effective only as a court having jurisdiction over the assets may order under 20 Pa.C.S. Ch. 77 (relating to trusts) or other applicable provisions of law. (July 9, 2013, P.L.476, No.67, eff. 60 days) Cross References. Section 5550 is referred to in section 314 of this title.

15 Pa.C.S. § 5551 Dividends prohibited; compensation and certain payments authorized.

(a) General rule.--A nonprofit corporation shall not pay dividends or distribute any part of its income or profits to its members, directors, or officers. Nothing herein contained shall prohibit a fraternal benefit society operating under the insurance laws of Pennsylvania from paying dividends or refunds by whatever name known pursuant to the terms of its insurance contracts. (b) Reasonable compensation for services.--A nonprofit corporation may pay compensation in a reasonable amount to members, directors, or officers for services rendered. (c) Certain payments authorized.--A nonprofit corporation may confer benefits upon members or nonmembers in conformity with its purposes, may repay capital contributions, and may redeem its subvention certificates or evidences of indebtedness, as authorized by this article, except when the corporation is currently insolvent or would thereby be made insolvent or rendered unable to carry on its corporate purposes, or when the fair value of the assets of the corporation remaining after such conferring of benefits, payment or redemption would be insufficient to meet its liabilities. A nonprofit corporation may make distributions of cash or property to members upon dissolution or final liquidation as permitted by this article. (July 30, 1975, P.L.128, No.63; July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 reenacted section 5551. Cross References. Section 5551 is referred to in sections 5545, 7112 of this title.

15 Pa.C.S. § 5552 (Reserved).

(July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 renumbered former section 5552 to section 5553 and added section 5552 (Reserved).

15 Pa.C.S. § 5553 Liabilities of members.

(a) General rule.--A member of a nonprofit corporation shall not be liable, solely by reason of being a member, under an order of a court or in any other manner for a debt, obligation or liability of the corporation of any kind or for the acts of any member or representative of the corporation. (b) Obligations of member to corporation.--A member shall be liable to the corporation only to the extent of any unpaid portion of the capital contributions, membership dues or assessments which the corporation may have lawfully imposed upon him, or for any other indebtedness owed by him to the corporation. No action shall be brought by any creditor of the corporation to reach and apply any such liability to any debt of the corporation until after: (1) final judgment has been rendered against the corporation in favor of the creditor and execution thereon returned unsatisfied; (2) a case involving the corporation has been brought under 11 U.S.C. Ch. 7 (relating to liquidation) and a distribution has been made and the case closed or a notice of no assets has been issued; or (3) a receiver has been appointed with power to collect debts, and the receiver, on demand of a creditor to bring an action thereon, has refused to sue for the unpaid amount, or the corporation has been dissolved or ceased its activities leaving debts unpaid. (c) Action by a creditor.--An action by a creditor under subsection (b) shall not be brought more than three years after the happening of the first to occur of the events listed in subsection (b)(1) through (3). (June 22, 2001, P.L.418, No.34, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 renumbered and amended former section 5553 to section 5554 and renumbered former section 5552 to section 5553.

15 Pa.C.S. § 5554 Annual report of directors or other body.

(a) Contents.--The board of directors or other body of a nonprofit corporation shall present annually to the members a report, verified by the president and treasurer or by a majority of the directors or members of the other body, showing in appropriate detail the following: (1) The assets and liabilities, including trust funds, of the corporation as of the end of the fiscal year immediately preceding the date of the report. (2) The principal changes in assets and liabilities, including trust funds, during the fiscal year immediately preceding the date of the report. (3) The revenue or receipts of the corporation, both unrestricted and restricted to particular purposes, for the fiscal year immediately preceding the date of the report, including separate data with respect to each trust fund held by or for the corporation. (4) The expenses or disbursements of the corporation, for both general and restricted purposes, during the fiscal year immediately preceding the date of the report, including separate data with respect to each trust fund held by or for the corporation. (5) The number of members of the corporation as of the date of the report, together with a statement of increase or decrease in their number during the year immediately preceding the date of the report, and a statement of the place where the names and addresses of the current members may be found. (b) Place of filing.--The annual report of the board of directors or other body shall be filed with the minutes of the meetings of members. (c) Report in absence of meeting of members.--The board of directors or other body of a corporation having no members shall direct the president and treasurer to present at the annual meeting of the board or other body a report in accordance with subsection (a), but omitting the requirement of paragraph (5). The report shall be filed with the minutes of the annual meeting of the board or other body. (d) Cross reference.--See section 6145 (relating to applicability of certain safeguards to foreign domiciliary corporations). (July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 renumbered and amended former section 5553 to section 5554. Cross References . Section 5554 is referred to in section 6145 of this title.

15 Pa.C.S. § 5585 Establishment or use of common trust funds authorized.

(a) General rule.--Every nonprofit corporation may establish and maintain one or more common trust funds, the assets of which shall be held, invested and reinvested by the corporation itself or by a corporate trustee to which the assets have been transferred pursuant to section 5549 (relating to transfer of trust or other assets to institutional trustee). Upon the payment by the corporate trustee to the nonprofit corporation of the net income from the assets, which income may be determined under section 5548(c) (relating to investment of trust funds) if the election is properly made by the board of directors or other body of the corporation, for use and application to the several participating interests in the common trust fund, the proportionate participation of each interest in the net income shall be designated by the corporate trustee. The nonprofit corporation may, at any time, withdraw the whole or part of any participating interest in the common trust fund for distribution by it as provided in this subchapter. (b) Limitations in trust instrument.--Nothing contained in this section shall be construed to authorize the corporation to invest assets of a trust or fund in any common trust fund contrary to any specific limitation or restriction contained in the trust instrument nor to limit or restrict the authority conferred upon the corporation with respect to investments by the trust instrument. (c) Effect of good faith mistakes.--Mistakes made in good faith and in the exercise of due care and prudence in connection with the administration of any common trust fund shall not be held to exceed any power granted to or violate any duty imposed upon the corporation if, promptly after the discovery of the mistake, the corporation takes whatever action may be practicable under the circumstances to remedy the mistake. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 21, 1998, P.L.1067, No.141, eff. imd.; July 9, 2013, P.L.476, No.67, eff. 60 days) Cross References. Section 5585 is referred to in section 5587 of this title.

15 Pa.C.S. § 5586 Restrictions on investments.

(a) Legal investments.--If the trust instrument limits or restricts the investment of the assets to investments of the class authorized by law as legal investments, a nonprofit corporation may invest and reinvest the assets of the trust or fund in any common trust fund maintained by the corporation if the investments composing the fund consist solely of investments of the class authorized by 20 Pa.C.S. Ch. 72 (relating to prudent investor rule) to be held by fiduciaries. (b) Other than legal investments.--If the trust instrument does not limit or restrict the investment of the assets to investments of the class authorized by law as legal investments, the corporation may invest and reinvest the assets of the trust or fund in any common trust fund maintained by the corporation composed of the investments as in the honest exercise of the judgment of the directors or other body of the corporation they may, after investigation, determine to be safe and proper investments. (July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5587 Determination of interests.

A nonprofit corporation shall invest the assets of a trust or fund in a common trust fund authorized by this subchapter by adding those assets thereto and by apportioning a participation therein to the trust or fund in the proportion that the assets of the trust or fund added thereto bears to the aggregate value of all the assets of the common trust fund at the time of the investment, including in those assets the assets of the trust or fund so added. The withdrawal of a participation from the common trust fund shall be on a basis of its proportionate interest in the aggregate value of all the assets of the common trust fund at the time of the withdrawal. The participating interest of any trust or fund in the common trust fund may from time to time be withdrawn, in whole or in part, by the corporation. Upon a withdrawal, the corporation may make distribution in cash, or ratably in kind, or partly in cash and partly in kind. Participations in the common trust funds shall not be sold by the corporation to any other corporation or person, but this sentence shall not prevent a corporate trustee designated under section 5585 (relating to establishment or use of common trust funds authorized) from investing the assets of the common trust fund in any collective investment fund established and maintained by it in accordance with law and to which the assets comprising the common trust fund are eligible contributions. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5588 Amortization of premiums on securities held.

If a bond or other obligation for the payment of money is acquired as an investment for any common trust fund at a cost in excess of the par or maturity value thereof, the nonprofit corporation may, during but not beyond the period that the obligation is held as an investment in the fund, amortize the excess cost out of the income on the obligation, by deducting from each payment of income and adding to principal an amount equal to the sum obtained by dividing the excess cost by the number of periodic payments of income to accrue on the obligation from the date of the acquisition until its maturity date. (July 9, 2013, P.L.476, No.67, eff. 60 days)

15 Pa.C.S. § 5589 Records; ownership of assets.

The nonprofit corporation shall designate clearly upon its records the names of the trusts or funds on behalf of which the corporation, as fiduciary or otherwise, owns a participation in any common trust fund and the extent of the interest of the trust or fund therein. The trust or fund shall not be deemed to have individual ownership of any asset in the common trust fund, but shall be deemed to have a proportionate undivided interest in the common trust fund. The ownership of the individual assets comprising any common trust fund shall be solely in the nonprofit corporation as fiduciary or otherwise. (July 9, 2013, P.L.476, No.67, eff. 60 days)
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026