2006 Code of Virginia § 13.1-907 - Distribution and plan of distribution of assets

13.1-907. Distribution and plan of distribution of assets.

A. The assets of a corporation in the process of dissolution shall be appliedand distributed as follows:

1. All liabilities and obligations of the corporation shall be paid,satisfied and discharged, or adequate provision shall be made therefor;

2. Assets held by the corporation upon condition requiring return, transferor conveyance, which condition occurs by reason of the dissolution, shall bereturned, transferred or conveyed in accordance with such requirements;

3. Assets received and held by the corporation subject to limitationspermitting their use only for charitable, religious, eleemosynary,benevolent, educational or similar purposes, but not held upon a conditionrequiring return, transfer or conveyance by reason of the dissolution, shallbe transferred or conveyed to one or more domestic or foreign corporations,societies or organizations engaged in activities substantially similar tothose of the dissolving corporation, pursuant to a plan of distributionadopted as provided in this chapter or as a court may direct;

4. Other assets, if any, shall be distributed in accordance with theprovisions of the articles of incorporation or the bylaws to the extent thatthe articles of incorporation or bylaws determine the distributive rights ofmembers, or any class or classes of members, or provide for distribution toothers;

5. Any remaining assets may be distributed to such persons, societies,organizations or domestic or foreign corporations, whether issuing shares ornot, as may be specified in a plan of distribution adopted as provided inthis chapter or as a court may direct.

B. A plan providing for the distribution of assets, not inconsistent with theprovisions of this chapter, may be adopted by a corporation in the process ofdissolution and shall be adopted by a corporation for the purpose ofauthorizing any transfer or conveyance of assets for which this chapterrequires a plan of distribution. A plan shall be adopted in accordance withthe procedures established in 13.1-902 or 13.1-903, as the case may be.

(Code 1950, 13-237, 13.1-249, 13.1-250; 1956, c. 428; 1985, c. 522.)