Nonprofit Corporation Membership Exit and Termination in Nebraska
At a glance
| Governing law and covered members | Nebraska Nonprofit Corporation Act; corporation need not have members (§ 21-1940) |
|---|---|
| Documents, classes, and decision maker | Articles/bylaws set admission and class differences; authorized person hears member under written procedure (§§ 21-1938, -1941, -1947(b)(1)) |
| Transfer of membership rights | Mutual benefit: permission in documents; public benefit/religious: no transfer; later restriction needs affected member approval (§ 21-1942) |
| Voluntary resignation | Member may resign at any time; earlier obligations/commitments remain (§ 21-1946) |
| Expulsion, suspension, and termination | Public/mutual benefit: fair, reasonable, good-faith procedure (§ 21-1947(a)) |
| Notice and opportunity to respond | Document route: 15 days’ written reasons notice, hearing 5 days before effect; contextual alternative; first-class/certified mail (§ 21-1947(b)-(c)) |
| Rights and records after exit | Member record supports class-by-class voting list; mutual benefit buyout may follow document terms (§§ 21-19,165(c), -1948(b)) |
| Dues and prior commitments | Earlier obligations survive resignation; expelled/suspended member may owe prior dues, assessments, fees (§§ 21-1944, -1946(b), -1947(e)) |
| Challenge period and remedy | Begin challenge, including defective-notice claim, within 1 year after effective action (§ 21-1947(d)) |
Requirements one by one
Transfer and resignation
Under § 21-1942(a)-(c), a mutual benefit member may transfer only if the articles or bylaws permit it. A public benefit or religious member may not transfer membership rights. A later restriction on an existing transfer right requires member approval and the affected member's approval. A member may resign at any time without erasing prior obligations or commitments (§ 21-1946(a)-(b)).
Expulsion, suspension, and termination
Under § 21-1947(a)-(e), public and mutual benefit corporations must use a fair, reasonable, good-faith procedure. A written document procedure can qualify with 15 days' advance notice stating reasons and a chance to respond orally or in writing to an authorized decision maker at least five days before the effective date. A procedure fair under all relevant circumstances is an alternative. Mailed notice uses first-class or certified mail to the last known address in corporate records.
What trips people up
Under § 21-1944, a provision or board resolution imposing dues alone does not create member liability. Under § 21-1948(a)-(b), public benefit and religious corporations cannot buy memberships; a mutual benefit corporation may buy a departing membership on article or bylaw terms, subject to the statutory payment limit. The corporation maintains a class-by-class member record that supports a voting list (§ 21-19,165(c)).
Common questions
Can a nonprofit operate without members?
Yes. Members are not required (§ 21-1940). When there are members, § 21-1941 permits class differences set by the articles or bylaws, and § 21-1938(a)-(b) allows admission criteria while requiring consent.
When must a challenge begin?
Under § 21-1947(d), a proceeding, including a defective-notice claim, must begin within one year after the exit action's effective date.
Statutes and sources
- Neb. Rev. Stat. §§ 21-1938, -1940, -1941, -1942, -1944, -1946, -1947, -1948: member scope, transfer, exit, and duties. Official Nebraska statutes, accessed 2026-10-03; individual section links are recorded above.
- Neb. Rev. Stat. § 21-19,165(c): member list record. Official section, accessed 2026-10-03.
Source links
Every statute quoted above, linked, with the date we checked it.
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