Kentucky Statutes 273A.100 – Duties of managers
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(1) A manager owes to the unincorporated nonprofit association the fiduciary duties of loyalty and care.
(2) 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.
(3) 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.
(4) 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.
(5) 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.
(2) 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.
Terms Used In Kentucky Statutes 273A.100
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Fiduciary: A trustee, executor, or administrator.
- Manager: means a person that is responsible, whether alone or in concert with others, for the management of an unincorporated nonprofit association. See Kentucky Statutes 273A.005
- Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. See Kentucky Statutes 273A.005
- Unincorporated nonprofit association: means an unincorporated organization consisting of two (2) or more members joined under an agreement that is oral, in a record, or implied from conduct, for one (1) or more common, nonprofit purposes. See Kentucky Statutes 273A.005
- Violate: includes failure to comply with. See Kentucky Statutes 446.010
(3) 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.
(4) 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.
(5) 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.