C.R.S.
Section 7-63-113
Dividends
(1)
As used in this section, the term “dividend” includes all distributions by an association to its members in respect of their interests in the association as members.(2)
An association may pay dividends from time to time to its members in cash or other property as its managers determine pursuant to this section and the bylaws. For principal and income accounting purposes of a fiduciary, and subject to the instrument under which the fiduciary acts, a dividend shall constitute income unless otherwise declared by the managers as chargeable to the capital accounts of the members.(3)
The determinations and declarations concerning a dividend shall be made by a majority in number of the managers; except that, if management is vested in the members or one or more classes of members, such determinations must also be approved by a majority in number and interest of the members. No debt of or interest in the association may be paid as a dividend unless authorized in writing by all of the members.(4)
No dividend may be paid if, after giving it effect:(a)
The association would not be able to pay its debts as they become due in the usual course of business; or(b)
The association’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the association were to be dissolved, to satisfy the preferential rights of members whose preferential rights are superior to those receiving the dividend.(5)
The managers authorizing a dividend contrary to subsection (4) of this section shall be jointly and severally liable to the association in the amount by which the dividend exceeds the dividend that could have been paid without violating said subsection (4) if it is established, subject to section 7-63-110 (6), that such managers did not perform their duties in compliance with section 7-63-110 (6). Section 7-63-110 (6) shall be applied for purposes of this subsection (5) without taking any contrary provisions of the bylaws into account.(6)
Managers shall also have the same rights of contribution from other managers and members as directors have against other directors and shareholders under the “Colorado Business Corporation Act”, articles 101 to 117 of this title.(7)
Subsections (3) and (6) of this section are default rules, subject to the bylaws.
Source:
Section 7-63-113 — Dividends, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-07.pdf (accessed Oct. 20, 2023).
Up to date