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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10600
Experience:  30 years of corporate, litigation and international law
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Where may we find laws or guide lines concerning the not

Customer Question

where may we find laws or guide lines concerning the not for profit corporations i.e. volunteer fire companies authority over managing of the company's business?
Jim Marcarello, treasurer
Vista (NY) Fire Department, Inc.
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 1 year ago.

Hello, my name is ***** ***** I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for.

Is your fire company incorporated? What is the particular question you have?

Customer: replied 1 year ago.
The fire department is incorporated......the issue in question is "may the elected officers, in particular the treasurer, make financial decisions for the department without obtaining members approval (by vote)"? The treasurer closed a "house" charge account at a local grocery store which department members used frequently to purchase food. He did so in compliance with NYS Comptroller guidelines which prohibit any purchases without prior approval. In place, the treasurer directed the holders of department credit cards to make the purchases and obtain approval prior to paying the credit card statement provided the purchases comply with department and municipal codes.
Expert:  Richard - Bizlaw replied 1 year ago.

Prior approval would not mean specific approval of a particular purchase. For example, you might have a heating contract where your heating oil is delivered monthly and you are billed based on how much oil it took to fill the tank. If the appropriate officers had approved that particular arrangement no further additional approval would be required for each delivery of the oil or payment of the bill submitted by the oil company. I think the problem with the open charge was that any member could go in and order for any particular purpose with or without prior approval. If the Treasurer or other appropriate officer said that a particular purchase was approved that would be the necessary prior approval. You can provide prior approval for categories of expenditures that are not determinable with precision at the time of the authorization. For example, suppose each Monday you authorize breakfast to be purchased for all the members from the local grocery store. A person who went to make the purchase each Monday would be approved to make the purchase even though the exact amount of the purchase each week would not be known. Once purchased the obligation is incurred and approved and is required to be paid by the organization. The approval is given prior to the charge by authorization for the general activity. Your procedure of approval prior to paying on the credit card is satisfactory but does not have to be done in that way to satisfy the prior approval requirement.

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