Regulation 11 Non-distribution of profits

(1)

In relation to an accounting period, an Association shall be deemed not to have complied with the condition in section 508(1)(b) if in the accounting period the Association directly or indirectly distributes, or intends to so distribute, in any manner or form any of its profits of that accounting period or any other accounting period to any of its members, subscribers or shareholders.

This is subject to paragraph (2).

(2)

Payments made by an Association to a member, subscriber or shareholder—

(a)

of reasonable remuneration for goods, labour, power supplied or services rendered,

(b)

of reasonable interest for money lent, or

(c)

of reasonable rent for any premises,

shall be treated as not being a distribution of profits for the purposes of paragraph (1) if such payments are not prohibited by the Association’s constitutional document.