The assets of a nonprofit corporation in the process of dissolution shall be applied and distributed as follows:
(1) All liabilities and obligations of the nonprofit corporation shall be paid and discharged, or adequate provision shall be made therefor;
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Terms Used In Alabama Code 10A-3-7.02
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
(2)Assets held by the nonprofit corporation upon condition requiring return, transfer or conveyance, which condition occurs by reason of the dissolution, shall be returned, transferred or conveyed in accordance with the requirements;(3) Assets received and held by the nonprofit corporation subject to limitations permitting their use only for charitable, religious, eleemosynary, benevolent, educational, or similar purposes, but not held upon a condition requiring return, transfer or conveyance by reason of the dissolution, shall be transferred or conveyed to one or more domestic or foreign corporations, societies or organizations engaged in activities substantially similar to those of the dissolving nonprofit corporation, pursuant to a plan of distribution adopted as provided in this chapter;(4) Other assets, if any, shall be distributed in accordance with the provisions of the governing documents to the extent that the governing documents determine the distributive rights of members, or any class or classes of members, or provide for distribution to others;(5) Any remaining assets may be distributed to the persons, societies, organizations, or domestic or foreign corporations, whether for profit or nonprofit, as may be specified in a plan of distribution adopted as provided in this chapter.
