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HomeCorporations CodeCh. 3Art. 3§ 12422 Membership Redemption Provisions

§ 12422 Membership Redemption Provisions

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 12422 Membership Redemption Provisions

This law says that a company's memberships usually can't be returned for money unless the company's rules say they can. If the rules allow it, the company can set specific conditions for when and how memberships can be returned.

Key Takeaways

  • •Memberships can't be returned for money unless the company's rules say so.
  • •If the rules allow it, the company can set specific conditions for returning memberships.
  • •The company can set aside money to buy back memberships if the rules allow it.

Example

Imagine you join a club that has a rule saying you can get your membership fee back if you move away.

If the club's rules allow it, you can get your money back when you move. But if the rules don't say anything about it, you can't get your money back.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 12422 Membership Redemption Provisions

(a) Unless the corporation’s articles or bylaws so provide, memberships are not redeemable. A corporation may provide in its articles or bylaws for one or more classes or series of memberships which are redeemable, in whole or in part, for such consideration within such time or upon the happening of one or more specified events and upon the terms and conditions stated in the articles or bylaws. However, no membership shall actually be redeemed if prohibited by Chapter 4 (commencing with Section 12450). (b) Nothing in this section shall prevent a corporation from creating a sinking fund or similar provision for, or entering into an agreement for, the redemption or purchase of its memberships to the extent permitted by Chapter 4 (commencing with Section 12450). (Amended by Stats. 2013, Ch. 538, Sec. 7. (AB 1255) Effective January 1, 2014.)

Last verified: January 10, 2026

Key Terms

redeemablemembershipsarticles or bylawssinking fundChapter 4

Related Statutes

  • § 7332 Redeemable Membership Provisions
  • § 12400 Membership Issuance Consideration Rules
  • § 12420 Worker Cooperative Membership Classes
  • § 12421 Equal Membership Rights
  • § 5311 Membership Consideration Determination

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 12422.
View Official Source