A decentralized unincorporated nonprofit association may reimburse and indemnify members or administrators, buy insurance for them, and former members or administrators can also keep these protections for earlier activities.
(a) Unless otherwise provided in its governing principles, a decentralized unincorporated nonprofit association may reimburse a member or administrator for authorized expenses reasonably incurred on behalf of the nonprofit association. (b) A decentralized unincorporated nonprofit association may indemnify a member or administrator for any debt, obligation, or other liability incurred in the course of the member or administrator’s activities on behalf of the nonprofit association. To be eligible for indemnification, an administrator must have complied with the duties stated in Section 10A-17-2.23. If in a record, a nonprofit association’s governing principles may broaden or limit this right of indemnification. (c) If a person is made or threatened to be made a party in a proceeding based on that person’s conduct in the affairs of a decentralized unincorporated nonprofit association, that person is entitled, upon written request to the decentralized unincorporated nonprofit association, including through distributed ledger technology, to receive payment of or reimbursement by the nonprofit association, of reasonable expenses, including attorney fees and disbursements, incurred by that person in advance of the final disposition of the proceeding. To be entitled to these payments or advances, the person making the request shall make a written affirmation that the person has a good faith belief that the criteria for indemnification in subsection (b) has been satisfied and that the person will repay the amounts paid or reimbursed if it is determined that the criteria for reimbursement has not been satisfied. No payment or reimbursement under this subsection shall be made without prior approval, in a record, of the disinterested members under Section 10A-17-2.20. (d) A decentralized unincorporated nonprofit association may purchase and maintain insurance on behalf of a member or administrator for liability asserted against or incurred by the member or administrator in that capacity, even if the decentralized unincorporated nonprofit association would not have the power to indemnify or advance expenses to the member or administrator against the same liability under this section. (e) These rights of reimbursement, indemnification, and advancement of expense apply to former members or administrators for activities undertaken on behalf of the decentralized unincorporated nonprofit association while they were members or administrators.