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HomeCorporations CodeCh. 3Art. 3§ 7332 Redeemable Membership Provisions

§ 7332 Redeemable Membership Provisions

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

§ 7332 Redeemable Membership Provisions

Key Takeaways

  • •A company can create memberships that can be bought back by the company or the member under certain rules.
  • •The rules for buying back memberships must be written in the company's official papers.
  • •No membership can be bought back if it's against the rules in Chapter 4 of the law.
  • •A company can set aside money or make deals to buy back memberships, as long as it follows Chapter 4.

Example

Imagine you join a gym that offers a special membership. The gym's rules say they can buy back your membership if you move away or if the gym decides to close that location.

The gym can only buy back your membership if they follow the rules they wrote down when they created the membership. They can't buy it back if another law says they can't.

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

Official Source
View on CA.gov

§ 7332 Redeemable Membership Provisions

(a) A corporation may provide in its articles for one or more classes of memberships which are redeemable, in whole or in part, at the option of the corporation, or the member for such consideration within such time or upon the happening of one or more specified events and upon such terms and conditions as are stated in the articles. However, no membership shall actually be redeemed if prohibited by Chapter 4 (commencing with Section 7410). (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 7410). (Added by Stats. 1978, Ch. 567.)

Last verified: January 23, 2026

Key Terms

redeemable membershipssinking fundChapter 4

Related Statutes

  • § 12422 Membership Redemption Provisions
  • § 12420 Worker Cooperative Membership Classes
  • § 12421 Equal Membership Rights
  • § 5330 Membership Rights And Classes
  • § 5331 Membership Rights And Equality

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 7332.
View Official Source