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273A.100 Duties of managers.
(1)
(2)
(3)
(4)
(5)
A manager owes to the unincorporated nonprofit association the fiduciary duties of
loyalty and care.
A manager shall manage the unincorporated nonprofit association in good faith, in a
manner the manager honestly believes to be in the best interests of the association,
and with such care, including reasonable inquiry, as a prudent person would
reasonably exercise in a similar position and under similar circumstances. A
manager may rely in good faith upon any opinion, report, statement, or other
information provided by another person that the manager reasonably believes is a
competent and reliable source for the information.
After full disclosure of all material facts, a specific act or transaction that would
otherwise violate the duty of loyalty by a manager may be authorized or ratified by a
majority of the members that are not interested directly or indirectly in the act or
transaction.
A manager that makes a business judgment in good faith satisfies the duties
specified in subsection (1) of this section if the manager:
(a) Is not interested, directly or indirectly, in the subject of the business judgment
and is otherwise able to exercise independent judgment;
(b) Is informed with respect to the subject of the business judgment to the extent
the manager reasonably believes to be appropriate under the circumstances;
and
(c) Believes that the business judgment is in the best interests of the
unincorporated nonprofit association and in accordance with its purposes.
The governing principles in a record may limit or eliminate the liability of a
manager to the unincorporated nonprofit association or its members for damages for
any action taken, or for failure to take any action, as a manager, except liability for:
(a) The amount of financial benefit improperly received by a manager;
(b) An intentional infliction of harm on the association or one (1) or more of its
members;
(c) An intentional violation of criminal law;
(d) Breach of the duty of loyalty; or
(e) Improper distributions.
Effective: June 24, 2015
History: Created 2015 Ky. Acts ch. 34, sec. 31, effective June 24, 2015.
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