§ 12230 Membership Class Definitions

This law says a "Class" of membership means a group that is either named differently in the rules or has the same voting, dissolution, redemption, distribution, and transfer rights, as long as those rights are decided by the same formula for everyone.

Key Takeaways

•A "Class" can be a different name or the same rights.
•Rights are the same when the same calculation method is used for everyone.
•The law looks at the formula, not just the label, to decide if rights match.

Example

A nonprofit has two types of members: "Regular" members and "Supporter" members. Both types get one vote per share and the same share of any leftover money when the group ends.

Because the voting and money‑sharing rules are set by the same formula for both groups, the law treats them as the same "Class" even though they have different names.

How to Calculate

Rights are considered the same if they are determined by a formula applied uniformly.

List the rights you are comparing (voting, dissolution, redemption, distributions, transfer).
Identify the formula each class uses to calculate each right (e.g., 1 vote per share).
Check that the same formula is used for both classes for every right.
If the formula is the same for all rights, the classes are treated as having the same rights.

Two membership classes each own 100 shares. The formula for voting rights is "1 vote per share".

Result: Both Class A and Class B get 100 votes each, so their voting rights are the same under the formula.

Key Takeaways

•A "Class" can be a different name or the same rights.
•Rights are the same when the same calculation method is used for everyone.
•The law looks at the formula, not just the label, to decide if rights match.

Example

A nonprofit has two types of members: "Regular" members and "Supporter" members. Both types get one vote per share and the same share of any leftover money when the group ends.

Because the voting and money‑sharing rules are set by the same formula for both groups, the law treats them as the same "Class" even though they have different names.

How to Calculate

Rights are considered the same if they are determined by a formula applied uniformly.

List the rights you are comparing (voting, dissolution, redemption, distributions, transfer).
Identify the formula each class uses to calculate each right (e.g., 1 vote per share).
Check that the same formula is used for both classes for every right.
If the formula is the same for all rights, the classes are treated as having the same rights.

Two membership classes each own 100 shares. The formula for voting rights is "1 vote per share".

Result: Both Class A and Class B get 100 votes each, so their voting rights are the same under the formula.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 12230 Membership Class Definitions

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References