Code Section Group

Corporations Code - CORP

TITLE 1. CORPORATIONS [100 - 14631]

  ( Title 1 enacted by Stats. 1947, Ch. 1038. )


  ( Heading of Division 2 amended by Stats. 1978, Ch. 567. )


  ( Part 2 added by Stats. 1978, Ch. 567. )

CHAPTER 3. Members [5310 - 5354]

  ( Chapter 3 added by Stats. 1978, Ch. 567. )

ARTICLE 5. Rights and Obligations of Members and Creditors [5350 - 5354]
  ( Article 5 added by Stats. 1978, Ch. 567. )


(a) A member of a corporation is not, as such, personally liable for the debts, liabilities, or obligations of the corporation.

(b)  No person is liable for any obligation arising from membership unless the person was admitted to membership upon the person’s application or with the person’s consent.

(Added by Stats. 1978, Ch. 567.)


A corporation may levy dues, assessments or fees upon its members pursuant to its articles or bylaws, but a member upon learning of them may avoid liability for them by promptly resigning from membership, except where the member is, by contract or otherwise, liable for them. Article or bylaw provisions authorizing such dues, assessments or fees do not, of themselves, create such liability.

(Added by Stats. 1978, Ch. 567.)


(a) No action shall be brought by or on behalf of any creditor to reach and apply the liability, if any, of a member to the corporation to pay the amount due on such member’s membership or otherwise due to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such proceedings would be useless.

(b) All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any such creditor’s action to reach and apply unpaid amounts due the corporation and any or all members who owe amounts to the corporation may be joined in such action. Several judgments may be rendered for and against the parties to the action or in favor of a receiver for the benefit of the respective parties thereto.

(c) All amounts paid by any member in any such action shall be credited on the unpaid balance due the corporation by such member.

(Added by Stats. 1978, Ch. 567.)


Nothing in this part shall be construed as in derogation of any rights or remedies which any creditor or member may have against any promoter, member, director, officer or the corporation because of participation in any fraud or illegality practiced upon such creditor or member by any such person or by the corporation in connection with the issue or sale of memberships or securities or in derogation of any rights which the corporation may have by rescission, cancellation or otherwise because of any fraud or illegality practiced on it by any such person in connection with the issue or sale of memberships or securities.

(Added by Stats. 1978, Ch. 567.)


A person holding a membership as executor, administrator, guardian, trustee, receiver or in any representative or fiduciary capacity is not personally liable for any unpaid balance of the purchase price of the membership, or for any amounts owing to the corporation by the member, because the membership is so held; but the estate and funds in the hands of such fiduciary are liable therefor.

(Added by Stats. 1978, Ch. 567.)

CORPCorporations Code - CORP5.