Nonprofit Corporation Membership Exit and Termination in Montana
At a glance
| Governing law and covered members | Montana nonprofit act; corporation may have no members; transfer and exit rules distinguish entity type (§§ 35-2-512, -514, -520) |
|---|---|
| Documents, classes, and decision maker | Articles/bylaws may set admission and classes; authorized decision maker hears proposed exit under document route (§§ 35-2-510, -513, -520(2)) |
| Transfer of membership rights | Mutual benefit: no transfer unless documents allow; public benefit/religious: no transfer; existing right protected from later restriction (§ 35-2-514) |
| Voluntary resignation | Member may resign at any time; earlier obligations and commitments survive (§ 35-2-519) |
| Expulsion, suspension, and termination | Public/mutual benefit: fair, reasonable, good-faith procedure; religious corporation excluded from this section’s rule (§ 35-2-520(1)) |
| Notice and opportunity to respond | Document route: 15 days’ written reasons notice, hearing 5 days before effect; contextual alternative; mail or recorded authenticated electronic ID (§ 35-2-520(2)-(3)) |
| Rights and records after exit | Meeting list identifies members entitled to notice/vote; mutual benefit buyout possible on document terms; public/religious buyout barred (§§ 35-2-535(1), -522) |
| Dues and prior commitments | Resignation leaves earlier obligations; expelled/suspended member may owe prior dues, assessments, fees; document/board levy alone creates no liability (§§ 35-2-517, -519(2), -520(5)) |
| Challenge period and remedy | Begin public/mutual benefit exit challenge, including defective notice, within 1 year after effective action (§ 35-2-520(4)) |
Requirements one by one
Transfer and resignation
Under § 35-2-514(1)-(3), only mutual benefit corporations can authorize a transfer of membership or related rights through their articles or bylaws; public benefit and religious memberships cannot transfer. A later restriction on an existing transfer right is not binding without approval of the members and affected member. A member may resign at any time under § 35-2-519(1)-(2), but earlier obligations and commitments remain.
Involuntary exit and notice
For public and mutual benefit corporations, § 35-2-520(1)-(5) requires fair, reasonable, good-faith procedure. An article or bylaw procedure qualifies with 15 days' prior written reasons notice and a chance to be heard orally or in writing at least five days before the action takes effect, before someone authorized to stop it. A procedure taking all relevant circumstances into account is the alternative. Mailed notice uses first-class or certified mail to the last recorded address; written notice may instead go to a recorded authenticated electronic identification. The section does not include members of religious corporations in its first-subsection coverage.
What trips people up
Under § 35-2-513, articles or bylaws may establish classes with different rights and obligations; otherwise member rights are equal on voting, dissolution, redemption, and transfer. Under § 35-2-510(1)-(2), documents may set admission criteria but the entrant must consent. A corporation need not have members (§ 35-2-512).
Under § 35-2-517, a member may owe dues, assessments, or fees, but an article, bylaw, or board levy alone does not create liability. The prior-obligation language for expulsion or suspension is in § 35-2-520(5). A mutual benefit corporation can buy a departing membership on document terms subject to the stated payment limit; public benefit and religious corporations cannot purchase memberships (§ 35-2-522(1)-(2)). Under § 35-2-535(1), a meeting list shows members entitled to notice and their votes.
Common questions
How long may a member wait to challenge an expulsion?
Section 35-2-520(4) requires the proceeding, including a defective-notice claim, to begin within one year after the action's effective date.
Does a resignation erase earlier dues commitments?
No. Section 35-2-519(2) preserves obligations from commitments made before resignation. Section 35-2-517 cautions that a document or board levy alone does not create liability.
Statutes and sources
- Mont. Code Ann. §§ 35-2-510, -512 through -514, -517, -519, -520, -522, and -535: membership scope, transfer, exit, dues, buyout, and meeting list. Official Part 5 index, accessed 2026-10-03; each section's official URL is recorded in the source entries above.
Source links
Every statute quoted above, linked, with the date we checked it.
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