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socrateaser, Attorney
Category: Estate Law
Satisfied Customers: 37691
Experience:  Retired (mostly)
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Socrateaser please answer this question I have asked you several

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Socrateaser please answer this question
I have asked you several questions regarding Non Profit California Corporations .....I did ask this question previously, but need to address once again. How does California Corporation Code work in conjunction with a Public Benefit Non Profit corporations bylaws. As a CA organization do we as a non profit need to comply with the non profit CA code sections or do the bylaws of our organization take precedence? How do the two work in conjunction with each other? Truthfully I need a simple explanation so I can explain in lay terms to many people within my organization.....Thank you
Hello again,

There is no simple answer.

The answer to your question is, "yes," you must follow the Corporations Code, wherever it does not specifically permit the articles and bylaws to take precedence. The problem is that there is no way to know whether or not a particular issue is governed by the Code or the articles/bylaws without researching the Code to see if it takes precedence. Example:

Section 5211 provides in part: "(a) Unless otherwise provided in the articles or in the bylaws, all of the following apply: (1) Meetings of the board may be called by the chair of the board or the president or any vice president or the secretary or any two directors."

Here, the law permits the articles and bylaws to control who is empowered to call a board of directors meeting.

In contrast, Section 5213, provides in part: "(a) A corporation shall have a chair of the board, who may be given the title chair of the board, chairperson of the board, chairman of the board, or chairwoman of the board, or a president or both, a secretary, a treasurer or a chief financial officer or both...."

Here, the Code directs that the corporation "shall" have a COB or a President or both a COB and a President, and a secretary and a treasurer or a CFO or both a CFO and a treasurer. These positions are "mandatory," due to the use of "shall" in the Code.

Notice that the Code does not mandate a CEO (Chief Executive Officer) -- only a president or COB. There is nothing in the law to prevent the articles or bylaws from also requiring or permitting a CEO, but there is nothing that requires this office.

In sum, while I would love to give you a "one-size-fits-all" statement that will give everyone a straight forward set of rules to follow, I cannot do so. The law is what it is, and you must analyze it to determine whether or not the articles or bylaws can control a particular issue, or whether or not the Code mandates a particular result.

Hope this helps.
Customer: replied 3 years ago.

Thank you for your response. I understand the difficulty of providing a straight forward answer to my question, but when I get comments like this

"The California Corporations Code were used while we did not have legal bylaws". says to me that once bylaws are established we no longer as an organization need to follow CA Corp Code......this is not true based on what you are stating if I understand you I right? if so, can you provide an answer simple enough for me to pass to others in the organization......thank you

Corps Code 5151(c) provides: "The bylaws may contain any provision, not in conflict with law or the articles, for the management of the activities and for the conduct of the affairs of the corporation...."

This is the closest thing to a legislative statement of authority which demonstrates that there are limits to what the bylaws may control (i.e., "not in conflict with law," which means all California and federal laws, including the Corporations Code and Nonprofit Public Benefit Corporations Act).

I don't know what else to say about the issue, other than to turn it around on any person who asserts otherwise, to "Please cite the legal authority for your contention that our corporation bylaws overrule California law, and I will be happy to consider your position. However, until you provide legal authority for the assertion, I shall continue to treat the Corporations Code as the governing law of the corporation, except where it specifically permits the bylaws to control."

Yes, it's a bit snotty, the way I've characterized it. But, sometimes there is no alternative. I run into this problem every day -- especially among lawyers, who are dead certain that they know the law -- right up until the instant that I provide a contrary authority, and the judge agrees with me (and sometimes, opposing counsel will still not relent -- he/she will call the judge an idiot -- which may be true, but probably not so stupid as to ignore a flat statement of law that cannot be denied).

Hope this helps.
socrateaser, Attorney
Category: Estate Law
Satisfied Customers: 37691
Experience: Retired (mostly)
socrateaser and 3 other Estate Law Specialists are ready to help you
Customer: replied 3 years ago.

Helps alot...... thank you very much!!

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