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TexLaw
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The Colorado Revised Nonprofit Corporation Act says that board

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The Colorado Revised Nonprofit Corporation Act says that board of directors can be removed only by the membership that elected them....yet every bylaw set forth for charter schools states that the director can be removed by majority vote of other directors. Is this a difference in Law vs. Act, or is there a reason schools are able to have this in the bylaws? I have researched thoroughly and have not found one charter school that doesn't have this in their bylaws, yet the nonprofit corporation act says different. I cannot find the provision that states school can govern this policy themselves.
Submitted: 2 years ago.
Category: Legal
Expert:  TexLaw replied 2 years ago.
Hi,

Thanks for your question. I will take a look at the statute and get back to you shortly.

Are you certain that the charter schools are registered non-profit organizations?

-ZDN
Expert:  TexLaw replied 2 years ago.
Hi,

You are simply misinterpreting the statute.

The section you are referring to specifically states "the voting members may remove one or more directors elected by them" (Section 7-128-108(1)).

A "voting member" means "any person or persons who on more than one occasion, pursuant to a provision of a nonprofit corporation's articles of incorporation or bylaws, have the righ to vote for the election of a director or directors. A person is not a voting member solely by virtue of any of the followinng (a) any rights such person has as a delegate; (b) any rights such person has to designate a director or directors; or (c) any rights such person has as a director." (Section 7-121-401(40)).

In other words, the by-laws state who can vote for a director or who can remove a director. The Act is what provides for this. The Act is a statute and is law.

Please let me know if you need clarification.

-ZDN
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4213
Experience: Lead trial/International commercial attorney licensed 11 yrs
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Customer: replied 2 years ago.

So the charters are allowed to dictate how the removal is done in the by-laws? That is correct?

Expert:  TexLaw replied 2 years ago.
Somewhat.

The charter schools are allowed to define in the by-laws (or articles of incorporation) who is a voting member for purposes of removal of a director. So, if the by-laws say the director is elected by a voting group that has more people than just directors in it, then only that voting group can remove the director. Essentially, the rule is that if you got to vote for the director, then you have a right to vote on that director's removal. Most charter's bylaws will provide for a procedure in accordance with this rule.

If you have a situation where the bylaws of the charter do not comply with this section, you can challenge the specific section under the Act and have it struck or reformed by the court. If a removal was achieved by a vote which violated this section, it may be reversed by a court.

Please let me know if you have further questions.

-ZDN
Customer: replied 2 years ago.

I guess this is where the conflict rises. The bylaws of all these schools states that there is an election by the membership for the board of directors, yet it gives a provision in the bylaws for the directors to remove one of their own by just a 2/3 majority vote of the board. Yet what you are saying says that can't happen...but every charter is doing it. I know I am missing something here. Just not sure what it is.

Expert:  TexLaw replied 2 years ago.
OK.

If the by-laws say that the board of directors is elected by more than just the current board, then that voting group has to be allowed to vote on removing any elected director, pursuant to the Act. If the school's by-laws are stating that only the board of director's are allowed to vote on such a removal, then this is a violation of the Act. Thus, the by-laws may be challenged under the Act and any such removal may be reversed under the Act.

Is that clearer, or did I muddy the waters more???

-ZDN
Customer: replied 2 years ago.

I understand. You didn't muddy. The bylaws allow a provision for the membership to remove board members through that process. It just ALSO allows board members to remove another board member for "just cause" by a 2/3 vote. I did ask someone from the Colorado Charter School Institute and he says that the nonprofit act is a "safety net". Something that applies or can be used IF the bylaws do not have that provision. I do know that being a nonprofit does not affect our public school or charter status. So perhaps that is why. He said the bylaws supersede the nonprofit act. It is confusing...but perhaps that is as much clarification as I will ever get. THANK YOU!

Expert:  TexLaw replied 2 years ago.
I'm not certain that the Act is applicable only if the by-laws do not have a specific statement controlling. That is generally the way that a for-profit corporation works, but the Act seems to indicate that is not the way it works for non-profits.

Anyhow, I hope that this has helped.
Best,

ZDN

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