Login|Contact Us
Question and Answer

Business Law

Ask a Business Law Question, Get an Answer ASAP!

  • Ask A Question
  • Browse Answers
  • Meet The Experts
  • How JustAnswer Works

Changes to non-profit laws California AB1233. I work at a non-profit

 

Customer Question

Changes to non-profit laws California AB1233. I work at a non-profit 501c3 school incorporated in California. The board of directors has never let the ex-officio members vote. Does AB1233 apply to this school where the laws have changed allowing ex-officio members the same rights as directors including voting?

If so, then has the board been in violation of the law and do the votes count for the past two+ years that have been ignored?

Submitted: 390 days and 17 hours ago.
Category: Business Law
Value: $25
Status: CLOSED
Picture
Expert:  WiseOwl58 replied390 days and 17 hours ago.

No, the change in the law does not provide for ex-offico members to have the same voting rights as directors. Here is what changes the law provides. It does not include voting rights for ex-officio members:

AB 1233 makes many changes to the California Corporations Code as applied to nonprofit and cooperative corporations, notably:

  • The term "director," as currently defined in the Code includes a natural person, designated in the articles or bylaws or elected by the incorporators, as well as natural persons designated, elected or appointed by any other name or title to act as members of the governing body of the corporation. AB 1233 clarifies that a person who does not have authority to act as a member of that governing body is not a director, but if the articles or bylaws provide that a natural person is a director or a member of the governing body because he or she occupies a certain position, then that person is a director for all purposes.
  • The Code currently authorizes the articles of incorporation and bylaws of nonprofit corporations and consumer cooperatives to contain a provision requiring that an amendment or repeal of those articles or bylaws be approved in writing by a specified person or persons other than the board. The Code also authorizes the articles or bylaws to provide for the designation or selection of directors by a specified person or persons rather than by election by a member or members and similarly to authorize a specified person or persons to remove a designated or selected director. AB 1233 specifies that these approval requirements and designation and selection and removal entitlements are inapplicable or cease in those circumstances when the specified designator has died or ceased to exist, the office or status that created the right or entitlement has ceased to exist, or in certain cases, when the corporation has attempted and failed to obtain approval from the specified person or persons
  • Under the Code, a majority of the number of directors, authorized in the articles or bylaws, constitutes a quorum for the transaction of business of a nonprofit corporation or a consumer cooperative. AB 1233 authorizes the articles or bylaws to require the presence of one or more specified directors in order to constitute a quorum of the board to transact business, subject to certain specifications.
  • The Code currently authorizes a board of a nonprofit corporation or a consumer cooperative to form one or more committees consisting of 2 or more directors to serve at the pleasure of the board and provides that these committees have the authority of the board. AB 1233 prohibits a committee exercising the authority of the board from including, as members, persons who are not directors; however, it authorizes the board to create other committees with nondirectors that do not exercise the authority of the board.
  • The Code required a nonprofit corporation or consumer cooperative to have a chairman or a president or both, a secretary, a chief financial officer, and other officers as provided in the bylaws or determined by the board. AB 1233 requires such a corporation to have a chair, defined as to include a “chairman,” “chairwoman,” “chairperson” or “chair” of the board, or a president or both, a secretary, a treasurer or a chief financial officer or both, and other officers as provided in the bylaws or determined by the board. The bill also specifies that if there is no chief financial officer, the treasurer is the chief financial officer.
  • The Code authorizes a nonprofit corporation or consumer cooperative to elect to voluntarily wind up and dissolve by approval of a majority of the members, as defined, or by approval of the board and approval of the members, as defined. AB 1233 authorizes such a corporation meeting certain requirements, including the lack of a quorum, to elect to voluntarily wind up and dissolve.
  • Under the current Code, certain public benefit corporations deemed to be private foundations, as defined, are subject to certain requirements. This bill would make those requirements also applicable to nonprofit religious corporations deemed to be private foundations.
  • The Corporations Code prohibited a cause of action for monetary damages from arising against any director or officer of a nonprofit corporation or a nonprofit medical association, who serves without compensation, on account of any specified negligent act or omission if the nonprofit corporation or nonprofit medical association has a general liability insurance policy in a specified amount that is in force both at the time of the injury and at the time the claim is made. AB 1233 instead prohibits those causes of action if these corporations or associations maintain a liability insurance policy that is applicable to the claim.

Here is the link to the complete code section:

 

http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_1201-1250/ab_1233_bill_20091011_chaptered.html



So, it does not appear that your organization is out of compliance after all. Please press the green ACCEPT button. Good luck to you, and thanks.

Customer replied390 days and 12 hours ago.

I am referring to this paragraph:

5047. Except where otherwise expressly provided, "directors" means natural persons, designated in the articles or bylaws or elected by the incorporators, and their successors and natural persons designated, elected or appointed by any other name or title to act as members of the governing body of the corporation. A person who does not have authority to act as a member of the governing body of the corporation, including through voting rights as a member of the governing body, is not a director as that term is used in this division regardless of title. However, if the articles or bylaws designate that a natural person is a director or a member of the governing body of the corporation by reason of occupying a specified position within or outside the corporation, that person shall be a director for all purposes and shall have the same rights and obligations, including voting rights, as the other directors.

It seems tso me that because the principal and assistant principal are members of the board, they, by this law, are allowed to vote.

Picture
Expert:  WiseOwl58 replied390 days and 12 hours ago.

So, look at the sentence that begins However . . .

What that is saying is if the bylaws state that the Principal and Assistant Principal shall be voting members of the board of directors, they do not have to be specifically voted in as a director, they get a vote by virtue of the fact that they hold the postions of Principal and Assistant Principal. Normally those officers wouldn't have a vote on the board unless they were directors too.

What the 2009 law is saying is that you can put in your bylaws that whoever holds the position of Principal will have a vote on the board of directors.

If that provision is in your bylaws, then they get to vote. If it is not, then they would not have a vote unless they were also specifically elected as a director.

I think this clarifies it. Please press the green ACCEPT button now. Thank you.

Customer replied390 days and 12 hours ago.

I want to know if the bylaws do not specifically state that an ex-officio votes, but it has been assumed, can they now vote with the law AB1233?

Also, the organization has adopted Robert's Rules of Order which states that ex-officio members may vote. If the bylaws don't state it, or even if they DO, and they also follow Robert's Rules of Order, that appears to be a conflict.

Accepted Answer

Picture
Expert:  WiseOwl58 replied390 days and 11 hours ago.

The California law says that the articles or bylaws must specify that the person is a director by virtue of the position that they hold. So, it must be in the articles and bylaws, or else it would not give the ex officio offiers the right to vote as a director. The California law would preempt Roberts Rules of Order, which was not written specifically for California.

Expert TypeAttorney
Category: Business Law
Pos. Feedback: 97.2 %
Accepts: 670
Answered: 4/23/2012

Experience: Experienced business lawyer.

Ask this Expert a Question >
 
Tweet

11 Business Lawyers are Online Right Now

Ask Your Question Now
Business Law Questions Date Submitted
How do I collect from UCC filing in NY against receivable of 5/15/2013
Can you use a public photo taken from online or an actual 5/15/2013
QUESTIONS FOR A LAWYER5/11/2013The Problem: Fred Furrer 5/14/2013
My purchase of a cooperative apartment in NYC was rejected 5/13/2013
is there a special business law for people with a criminal 5/13/2013
Situation: A fellow Director of our company has set up an 5/11/2013
Hello, I am uncertain as to whether this is a business law 5/1/2013
To bizlaw. I need you to review an Opinion and Order. Please respond so I can attach the 4/27/2013
Not sure if this is business law or not! Please advise if I 4/20/2013
I leased a property that has a 4/13/2013
RSS
Next 10 >
Ask A Business Lawyer
Type Your Business Law Question Here...
characters left:

Top Business Law Experts

See More Business Lawyers

JustAnswer in the News

Nbc
Washington Post
New York Times
Cnn
Learn More

How It Works

  • Ask an Expert
  • Get a Professional Answer
  • Ask Followup Questions
  • 100% Satisfaction Guarantee
Learn More
 
 
 

Recent Articles in Business Law

  • Board of Directors Related Questions
  • Bar Business Questions
  • Privacy Policy Laws
  • Legal Disclaimer Related Questions
  • Stock Trading Laws
  • Legal Jurisdiction Related Questions
  • Limited Liability Partnership
  • Professional Limited Liability Company
  • Piercing the Corporate Veil
  • Questions about Export Laws and Rules
All Business Law Articles
 
 
 
close
Find Expert answers related to your question.
Sign up using email
We will never post anything without your permission.
Already have an account? Sign in

Ask a Business Lawyer

Get a Professional Answer. 100% Satisfaction Guaranteed.
178 Business Lawyers are Online Now
Type Your Business Law Question Here...
characters left:

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Truste
Contact Us | Terms of Service | Privacy & Security | About Us | Our Network
© 2003-2013 JustAnswer LLC
  • Pearl.com
  • JustAnswer UK
  • JustAnswer Germany
  • JustAnswer Spanish
  • JustAnswer Japan