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Zachary
Zachary, Attorney
Category: Legal
Satisfied Customers: 3814
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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If you have a nonprofit corp vet clinic and wildlife center,

Customer Question

If you have a nonprofit corp vet clinic and wildlife center, and the four board of directors
decide to resign with a letter of resignation effective June 1,2013, can the owners of the non profit corp, terminate the BOD before June 1,2013 and appoint a new board themselves?
Submitted: 1 year ago.
Category: Legal
Expert:  Zachary replied 1 year ago.
Hi,

Thank you for your question.

The owners of the clinic will not be able to terminate the BOD prior to the June 1, 2013 resignation date. The by-laws or incorporating documents should provide for a procedure which is followed when a board member resigns for electing new board members. The owners need to follow that procedure.

Please let me know if you have any questions. Please also remember to kindly rate my answer positively so that I am compensated by the website for my work on your question. Rating does not cause any additional charges and will not prevent us from further discussing your questions.

Best Regards,
ZDN
Zachary, Attorney
Category: Legal
Satisfied Customers: 3814
Experience: Lead trial/International commercial attorney licensed 11 yrs
Zachary and 2 other Legal Specialists are ready to help you
Customer: replied 1 year ago.

Hi, I have a question regarding the BOD and some new issues with them. They are appointing a new BOD as of June 1st. However, they sent the owners of the clinic the BOD minutes from the meeting. In it they stated that they want to be paid $300.00 each for their time, mileage, etc for the time they were on the board. They said in the minutes that is was to be paid by May 30th. Don't they need to have some kind of invoice or something? My understanding is these are just minutes of the meeting and not a formal request for payment. This is a 501c3 corp and I would think that it is inappropiate to think she would just send them checks without some kind of bill. Should she just ask for an invoice or wait until the new board takes over. Please advise. Thank, Diane Mork

Expert:  Zachary replied 1 year ago.
Hi,

The BOD may take payment such as this only if it is authorized by the bylaws or articles of incorporation.

If authorized, the minutes of the charity will be sufficient for documentation purposes, and no invoice is needed.

-ZDN
Customer: replied 1 year ago.


If the bylaws state that they are in charge of all monies that come into the clinic, and have the right to disperse such funds.Does this count? Or do the bylaws have to specifically say that the board can be compensated for their time and effort. Does it have to be stated either in AOI or the Bylaws. Thanks, diane

Expert:  Zachary replied 1 year ago.
The clause to which you are referring does not authorize payment of monies to the BOD. It will be a very specific statement that says something like "the board may be reimbursed for expenses and paid a small amount for their time..." etc.

It will either be in the AOI or the Bylaws...either one will do (most likely it would be in the bylaws).
Customer: replied 1 year ago.


If the clinic does not pay them on the 30th of May, is their any trouble that she (the clinic) can get into? If the current BOD refuses to give her an updated copy of the bylaws, can she withold payment until she gets an updated copy of AOI and Bylaws? Would she be better off just waiting the two days until the new board takes over on the 1st of June, at that ime the new board will have the updated copies of all current business.

Expert:  Zachary replied 1 year ago.
My understanding of your situation is that the clinic is run by a BOD. If the clinic does not follow the directions of the BOD, it could result in some kind of attempt to remove her as an officer of the company (I'm unclear on the exact ownership structure here).

The BOD is in charge of the organization, so their say controls. If the BOD's actions are unauthorized, then the members can all be held individually accountable for this unauthorized action later.

Practically, though, she could simply delay the payments by not responding to the demand.

If permitted, she should raise and objection to the payments on the records to be reflected in the minutes if she believes it is unauthorized. (Perhaps send a letter to the company).

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