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I am the secretary, corresponding & recording. Basic formalities involve keeping/recording proper minutes (almost none for the BOD in 38 yrs), annual audit required but not done, clearly delineated membership/election procedures not followed. Minimal, very defective procedure in transacting business in meetings. Seven entire years are corporate records are non-existent (minutes, etc.) I do not have direct knowledge of fraud, though the records states they have "taken over" (don't know what that really means) another entity which is a 501(c)(3) yet no accounting or auditing of that entity and its charitable fund-raising is in this corp record. Ilegal meetings held and electronic voting both dissallowed under both State law and bylaws. Former secretary secretly engaged in proxy voting, in violation. Meetings without quorums. I am a retired attorney, not licensed in WA, and business law was not my primary practice. I have advised of importance of following procedure and why, but the entire board acts in contravention of unambiguous bylaw language. It seems textbook anarchy but I can find no real legal remedy.
Fine, but I have already read the RCW corp statutes. I don't have subscrip to westlaw/lexis so cannot research case law anymore. I cannot see the policy rationale for statute requiring adoption of bylaws and corporate formality with no legal or equitable remedy to enforce them. (For instance, TN law has grounds for conducting business in "persistently fraudulent or illegal manner.") Shareholder deriviative seems economically unwise in view of small financial stake. Begins to sound like relief is only available to the wealthy.
Thank you for your follow-up.I do not see it as a remedy for just the wealthy. Since you are a Secretary of the non-profit, you are a member of the board and that permit you to file suit on behalf of the non-profit against the other members on grounds of breach of fiduciary duty, something that from your facts is very likely to have taken place. In addition a non-profit is a federally granted designation, which means that contacting the IRS and have them investigate the entity is fully within your power. For a breach of fiduciary duty claim, if you end prevailing, you have the right to have the legal fees reimbursed since the suit was on behalf of entity and not yourself. Hence that may be at least a valid option to consider. Please let me know if I can assist in any other way.
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