Texas Business Organizations Code 251.403 – Distribution of Assets
Terms Used In Texas Business Organizations Code 251.403
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: means an entity governed as an association under Title 6 or 7. See Texas Business Organizations Code 1.002
- Certificate of formation: means :
(A) the document required to be filed with the filing officer under Chapter 3 to form a filing entity; and
(B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation. See Texas Business Organizations Code 1.002 - cooperative association: means an association governed as a cooperative association under Chapter 251. See Texas Business Organizations Code 1.002
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
Subject to Sections 11.052 and 11.053(a), the trustees designated under Section 251.401 shall distribute the cooperative association‘s assets in the following order:
(1) by returning the par value of the investors’ capital to investors;
(2) by returning the amounts paid on subscriptions to subscribers for invested capital;
(3) by returning the amount of patronage dividends credited to patrons’ accounts to the patrons;
(4) by returning to members their membership capital; and
(5) by distributing any surplus in the manner provided by the certificate of formation:
(A) among the patrons who have been members or subscribers of the cooperative association during the six years preceding the date of termination, on the basis of patronage during that period;
(B) as a gift to any cooperative association or other nonprofit enterprise designated in the certificate of formation; or
(C) by a combination of both methods of distribution.