Pennsylvania Consolidated Statutes

15 Pa. Cons. Stat. § 5551 (2026)

Dividends prohibited; compensation and certain payments authorized.

✓ current as of May 2026

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§ 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.

Notes of Decisions

Cited in 2 cases, 2006–2013 · leading case: Ciamaichelo v. Indep. Blue Cross, 909 A.2d 1211 (Pa. 2006).

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Ciamaichelo v. Indep. Blue Cross, 909 A.2d 1211 (Pa. 2006). · cites it 4× “§ 5545, [2] and that under Section 5551(c) of the same statute, 15 Pa.C.S. § 5551(c), [3] IBC's excess surplus *1214 should have been used to subsidize coverage for the uninsured citizens of Pennsylvania, expand the coverage it provides or returned to its policyholders,…”

Wooden v. Highmark, Inc., 32 Pa. D. & C.5th 377 (2013). “15 Pa. Cons. Stat. Ann. § 5551 (a). . Id.”

— 15 Pa. Cons. Stat. § 5551(c) — 1 case

Ciamaichelo v. Indep. Blue Cross, 909 A.2d 1211 (Pa. 2006). “§ 5545, [2] and that under Section 5551(c) of the same statute, 15 Pa.C.S. § 5551(c), [3] IBC's excess surplus *1214 should have been used to subsidize coverage for the uninsured citizens of Pennsylvania, expand the coverage it provides or returned to its policyholders,…”

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