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We are a CA 501(c)(3) corporation. We cannot get a meeting

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We are a CA 501(c)(3) corporation. We cannot get a meeting together with the board of directors. Most no longer wants to participate but are not replying to emails requesting meeting. How can we dissolve the current board??? When formed, the officers were self-elected and not added into the by-laws as members, specifically, on the board and their number (5) was not added to the board number of 6.
Submitted: 1 year ago.
Category: Business Law
Expert:  RESPONDER9 replied 1 year ago.

RESPONDER9 :

Hello and welcome to JustAnswer.com. I will attempt to answer your question. I am very sorry to see you are dealing with this issue. The issue of how to remove of directors from the Board should appears in your bylaws. California law states any of the directors of a nonprofit can be removed without cause by its members. If the nonprofit has 50 members of less, a vote of the majority of the entire membership is required for removal. If there are more than 50 members, a vote of the majority of the members present and voting at a duly noticed meeting with a quorum is sufficient for removal. For unusual cases of nonprofits with special voting rights, such as cumulative membership voting and class membership voting, the rights to remove directors by voting must adhere to the special rights specified in the nonprofit's bylaws(but you have indicated this is not the case here). If the nonprofit has no members, a director may be removed by a majority of the current directors. I hope this answers your question and ask that you kindly rate me positively after reading this or the service will not pay me for my work. For your assistance, I have forwarded this link with some general guidance as well. http://oag.ca.gov/sites/all/files/pdfs/charities/publications/guide_for_charities.pdf

Expert:  RESPONDER9 replied 1 year ago.
Hi JoAnn, I have switched to this format to insure you can read my answer.
Customer: replied 1 year ago.

Your answer does not cover problems we have raising a MAJORITY, plus, it does not address whether or not the elected officers of the organization are or were automatically considered as members of the board of directors even though our by-laws indicated the number 6 as board members ... not including the actual officers. Must the by-laws specifically indicate that the officers be counted in the non-officer board member number. If so, can we amend the by-laws at the same time and can we call an emergency meeting and/or declare an emergency situation of any number present so that we can establish a functioning board.

Expert:  RESPONDER9 replied 1 year ago.
I am very sorry, JoAnn, that it does not appear my answers have been helpful though I have tried to assist. Therefore I will opt out to allow another expert a chance to assist you.
Customer: replied 1 year ago.
Relist: Answer quality.
Your expert has failed to grasp the entire content of our situation regarding original entity formation; are the elected officers automatically regarded as members of the board of directors? Can we amend the by-laws to include language stating that organization officers are members of the board of directors and include their number (5)into the board number of 6 ... making a total of 11. Finally, we want to terminate several directors from the board due to inactivity/commitment; however, we cannot get a quorum for a vote... what do you suggest to resolve all issues?
Expert:  TexLaw replied 1 year ago.
Hi,

I'll pick up from where the last expert left off. I understand your problem, you cannot get a quorum and therefore cannot act to remove the unwanted directors.

Here are my suggestions. You've stated that attempts to contact the unresponsive directors have only been made by email. I suggest that you go further in your attempts to contact them by trying to call them and send a formal certified letter. In the letter, you need to place a ballot form which states exactly what you want them to vote on and ask for them to vote by proxy and send the form back to you. You should also include a forum resignation proposal and tell them that if they wish to resign, they may do so by filling out the form and sending it back to you.

You should have a cover letter explaining the situation and also formally notifying the directors that they have a fiduciary duty to the non-profit under California law, and their failure to act on this request will be seen as an admission of liability for the breach of this fiduciary duty and will be acted upon legally by the Corporation.

In the end, if the directors fail to take action, and the by-laws do not provide any sort of remedy, you will have to sue the director and ask the court to remove the director and for the costs of the removal suit. Here is some interesting reading on non-profit director liability: http://apps.americanbar.org/buslaw/newsletter/0003/materials/tip4.pdf

Please let me know if you want to discuss this further or have other questions. Please also consider changing your rating on this question to positive, so that I may be compensated for my work here.
Customer: replied 1 year ago.

SORRY .... still not completely answering our situation. Under CA law, are the original principles forming the corporation considered DIRECTORS at that point???? And, if so causing an election to select organization officers, pres, secy and treasurer, etc STILL regards XXXXX XXXXX DIRECTORS??? If your answer is yes, then should those 5 individuals have been counted in the By-Laws as DIRECTORS??? Because we did not count them in that number when we created the actual By-Laws .... the number really should have been corrected when writing the By-Laws:



ARTICLE 3


DIRECTORS


 


SECTION 1. NUMBER


 


The corporation shall have not less than three (3) and not more than seven (7) directors, with the exact number to be fixed within these limits by approval of the Board of Directors or members, if any, in the manner provided in these bylaws.


 


As you can see the actual number should have been any odd number from 3 to 7 (or 11).


 


Finally, 3 individuals formed the entity; however, IRS notified us to increase the DIRECTORS to at least 7 which we did by approving 4 people as DIRECTORS which added to the original officer/directors totaled 7.


 


If this action is correct and accurate, then we always have a quorum with the new 5 officer/directors..... IS THIS CORRECT?????

Expert:  TexLaw replied 1 year ago.
I'm a bit confused. You are saying that originally, when the non-profit was formed, you had three directors. During your 501(c)(3) application the IRS notified you to increase the number to seven. You added four more people and also made the original directors into officers?

So, just so I'm clear, because I can't understand from the different number floating around above, there are four directors and three officers who were the original directors. You want to know if the three officers should still be counted as directors?
Customer: replied 1 year ago.

YES!!!! That is the only question ... because, if you answer YES, then we will always have a QUORUM required to conduct official organization business. The correction to the actual By-Laws document will be easy to make AND .... removing the dysfunctional directors will be easy also.

Expert:  TexLaw replied 1 year ago.
My answer is a definite Yes. The officers were already directors. As long as there is no document showing that they stepped down as directors, I think you can use that as a quorum and get rid of the non-participating directors or amend the bylaws as needed.
Customer: replied 1 year ago.

EXCELLENT!!!!!


 


I appreciate your "determination" to help us. HAPPY TO DO BUSINESS WITH YOU.


 


 

Expert:  TexLaw replied 1 year ago.
I'm glad we got down to the bottom of it! Please let me know if you need anything further.

Thanks,
ZDN
TexLaw, Attorney
Category: Business Law
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