Non- Profit Corporations: Selected Statues Related to Members

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1 Non- Profit Corporations: Selected Statues Related to Members CONNECTICUT Sec Classes of members. A corporation may have one or more classes of members or may have no members. If the corporation has one or more classes of members, the designation of such class or classes shall be set forth in the certificate of incorporation and the manner of election or appointment and the qualifications and rights of the members of each class shall be set forth in the certificate of incorporation or bylaws. If the corporation has no members, or only members not entitled to vote, that fact shall be set forth in the certificate of incorporation and the corporation shall operate under the management of its board of directors. A corporation may issue certificates evidencing membership therein. Sec Rules for membership. (a) Membership shall be governed by such rules of admission, retention, withdrawal and expulsion as the bylaws shall prescribe, provided all such bylaws shall be reasonable, germane to the purposes of the corporation, and equally enforced as to all members. (b) Unless otherwise provided in the certificate of incorporation or the bylaws, another entity, foreign or domestic, may become a member of a corporation. (c) Membership may be limited to persons who are members in good standing of another corporation, organization or association, if so provided in the certificate of incorporation. If membership is so limited, the certificate of incorporation may provide that failure on the part of any such member to keep in such good standing in such other corporation, organization or association shall be

2 sufficient cause for expulsion. (d) Unless otherwise provided in the certificate of incorporation or bylaws, a member may not voluntarily or involuntarily transfer his membership or any rights arising therefrom. (e) Unless otherwise provided in the certificate of incorporation or bylaws, membership shall be terminated by death, voluntary withdrawal or expulsion, and thereafter all rights and privileges of the member in the corporation and its property shall cease. Sec Liability of members. (a) A member of a corporation shall not be liable to the corporation or its creditors with respect to such membership except for the obligation to pay in full any fines or penalties duly imposed against him and any dues and assessments levied against him to which he has assented, or imposed or levied against him in accordance with the provisions of section (b) Any member who receives any distribution of income or assets from a corporation in violation of sections to , inclusive, or of the certificate of incorporation, whether by dividend, in liquidation or otherwise, and who accepted or received such distribution knowing it to be improper, shall be liable for the amount so received: (1) To any creditors existing at the time of such distribution who shall obtain a judgment against such corporation on which execution shall be returned unsatisfied; and (2) to the corporation. Sec Member voting rights. (a) Unless the certificate of incorporation provides otherwise, each member, regardless of class, is entitled to one vote on each matter voted on at a meeting of members. Voting rights of members of any class may be increased, limited or denied by the certificate of incorporation.

3 (b) Members otherwise entitled to vote, but disqualified from voting for any reason, shall not be considered for the purpose of quorum or of computing the voting power of the corporation or of members of any class. (c) A corporate member's vote may be cast by the president of the member corporation or by any other officer of such corporation in the absence of express notice of the designation of some other person by the board of directors or bylaws of the member corporation. Sec Voting for directors. Cumulative voting. (a) Unless otherwise provided in the certificate of incorporation, directors are elected by a plurality of the votes cast by the members entitled to vote in the election at a meeting at which a quorum is present, or if voting by mail is permitted pursuant to section , in an election in which the total number of members who vote is not less than the number required for a quorum. (b) Members do not have a right to cumulate their votes for directors unless the certificate of incorporation so provides. (c) A statement included in the certificate of incorporation that "all or a designated class of members are entitled to cumulate their votes for directors", or words of similar import, means that the members designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates. (d) Members otherwise entitled to vote cumulatively may not vote cumulatively at a particular meeting unless: (1) The meeting notice states conspicuously that cumulative voting is authorized; (2) a member who has the right to cumulate his votes gives notice

4 to the corporation not less than forty-eight hours before the time set for the meeting of his intent to cumulate his votes during the meeting, and if one member gives this notice all other members in the same class participating in the election are entitled to cumulate their votes without giving further notice; or (3) if voting is to be by mail pursuant to section , (A) the bylaws specify how election of directors shall be conducted if members vote cumulatively by mail, (B) the notice of the meeting states conspicuously that cumulative voting is authorized and how the election is to be conducted, and (C) the mail ballot provides for cumulative voting. Sec Removal of directors by members or directors. (a) The members entitled to vote for the election of directors or, if there are no such members, the directors, may remove one or more directors with or without cause unless the certificate of incorporation provides that directors may be removed only for cause. (b) If a director is elected by a class of members only the members of that class may participate in the vote to remove him. (c) If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect him under cumulative voting is voted against his removal. If cumulative voting is not authorized, a director may be removed only if the number of votes cast to remove him exceeds the number of votes cast not to remove him. (d) A director may be removed by the members entitled to vote for directors or, if there are no such members, the directors, only at a meeting called for the purpose of removing him and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.

5 Sec Amendment by board of directors and members. (a) If a corporation has members, an amendment to the certificate of incorporation shall be adopted as provided in this section. A proposed amendment must be adopted by the board of directors. (b) (1) Except as provided in sections , and , after adopting the proposed amendment, the board of directors must submit the amendment to the members entitled to vote on the amendment, if any, for their approval. If any members are entitled to vote on the amendment to the certificate of incorporation, the board of directors must also transmit to such members a recommendation that such members approve the amendment, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to such members the basis for such determination. (2) The board of directors may condition its submission of the amendment to the members on any basis. (c) If members are entitled to vote on the amendment to the certificate of incorporation, the members must approve the amendment, either before or after the actions required in subsections (a) and (b) of this section, as provided in subsection (e) of this section. (d) If the amendment is required to be approved by the members, and the approval is to be given at a meeting, the corporation must notify each member entitled to vote on the amendment, if any, of the meeting of members at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment and must contain or be accompanied by a copy of the amendment.

6 (e) Unless sections to , inclusive, the certificate of incorporation or the board of directors acting pursuant to subdivision (2) of subsection (b) of this section requires a greater vote or a vote by class of members, the amendment to be adopted must be approved by: (1) If no class of members is entitled to vote separately on the amendment as a class, at least two-thirds of the votes cast by the members entitled to vote thereon; and (2) if any class of members is entitled to vote on the amendment separately as a class, at least two-thirds of the votes cast by the members of each such class. (f) If the corporation has no members, or no members entitled to vote, the proposed amendment shall be adopted by vote of at least two-thirds of the directors present at a meeting of the board of directors at which a quorum is present. Sec Amendment by board of directors or members. (a) A corporation's board of directors may amend or repeal the corporation's bylaws unless: (1) The certificate of incorporation or sections to , inclusive, reserve this power exclusively to the members in whole or in part; or (2) the members in amending or repealing a particular bylaw provide expressly that the board of directors may not amend or repeal that bylaw. (b) If a corporation has members who have the right under the certificate of incorporation to vote on amendments to the corporation's bylaws, such members may amend or repeal the corporation's bylaws even though the bylaws may also be amended or repealed by its board of directors.

7 NEW YORK 601. Members. (a) A corporation shall have one or more classes of members, or, in the case of a charitable corporation, may have no members, in which case any such provision for classes of members or for no members shall be set forth in the certificate of incorporation or the bylaws. Corporations, joint-stock associations, unincorporated associations and partnerships, as well as any other person without limitation, may be members. (b) If the corporation has two or more classes of members, the designation and characteristics of each class and the qualifications and rights of, and limitations upon, the members of each class may be set forth in the certificate of incorporation, the by-laws or, if the by-laws so provide, a resolution of the board. (c) If the corporation has members, membership may be effected and evidenced by: (1) Signature on the certificate of incorporation. (2) Designation in the certificate of incorporation or the by-laws. (3) Membership certificate or card or capital certificate. (4) Such method, including but not limited to the foregoing, as is prescribed by the certificate of incorporation or the by-laws. (d) Membership certificates or cards shall not be transferable. If the certificate of incorporation or by-laws permits transfer of membership, upon each such transfer the certificate or card issued to a former member shall be surrendered, and a new

8 certificate or card shall be issued to the new member. (e) Except as otherwise provided in this chapter or the certificate of incorporation or the by-laws, membership shall be terminated by death, resignation, expulsion, expiration of a term of membership or dissolution and liquidation under articles 10 and By-laws. (a) The initial by-laws of a corporation may be adopted by its incorporators at the organization meeting and, if not so adopted by the incorporators, by its board. Any reference in this chapter to a "by-law adopted by the members" includes a by-law adopted by the incorporators. (b) Subject to section 612 (Limitations on right to vote), the by-laws may be adopted, amended or repealed by the members at the time entitled to vote in the election of directors and, unless otherwise provided in the certificate of incorporation or the by-laws adopted by the members, by the board. (c) Any by-law adopted by the board may be amended or repealed by the members and, unless otherwise provided in the certificate of incorporation or the by-laws adopted by the members, any by-law adopted by the members may be amended or repealed by the board. (d) In the case of a corporation which is subject, under any other law of this state, to regulation or control by a governmental body or officer, such body or officer may, to the extent provided in such other law, in furtherance of its or his authority to regulate or control: (1) Adopt, amend or repeal by-laws.

9 (2) Amend or repeal any by-law adopted by the members or the board. (e) If any by-law regulating an impending election of directors is adopted, amended or repealed by the board, there shall be set forth in the notice of the next meeting of the members for the election of directors the by-law so adopted, amended or repealed, together with a concise statement of the changes made. (f) The by-laws may contain any provision relating to the business of the corporation, the conduct of its affairs, its rights or powers or the rights or powers of its members, directors or officers, not inconsistent with this chapter or any other statute of this state or the certificate of incorporation Meetings of members. (a) Meetings of members may be held at such place, within or without this state, as may be fixed by or under the by-laws or, if not so fixed, at the office of the corporation in this state. (b) A meeting of the members shall be held annually for the election of directors and the transaction of other business on a date fixed by or under the by-laws. Failure to hold the annual meeting on the date so fixed or to elect a sufficient number of directors to conduct the business of the corporation shall not work a forfeiture or give cause for dissolution of the corporation, except as provided in paragraph (a) of section 1102 (Judicial dissolution; petition by directors or members; petition in case of deadlock among directors or members). (c) Special meetings of the members may be called by the board and by

10 such person or persons as may be authorized by the certificate of incorporation or the by-laws. In any case, such meetings may be convened by the members entitled to cast ten per cent of the total number of votes entitled to be cast at such meeting, who may, in writing, demand the call of a special meeting specifying the date and month thereof, which shall not be less than two nor more than three months from the date of such written demand. The secretary of the corporation upon receiving the written demand shall promptly give notice of such meeting, or if he fails to do so within five business days thereafter, any member signing such demand may give such notice. The meeting shall be held at the place fixed in the by-laws or, if not so fixed, at the office of the corporation. (d) A corporation may provide in its certificate of incorporation or by-laws adopted by the members for the election of representatives or delegates, who, when assembled within or without the state as directed by the certificate of incorporation or the by-laws, shall have and may exercise all of the powers, rights and privileges of members at an annual meeting. When so exercising the powers, rights and privileges of members, such representatives or delegates shall be subject in all respects to the provisions of this chapter governing members Action by members without a meeting. (a) Whenever, under this chapter, members are required or permitted to take any action by vote, such action may be taken without a meeting upon

11 the consent of all of the members entitled to vote thereon, which consent shall set forth the action so taken. Such consent may be written or electronic. If written, the consent must be executed by the member or the member's authorized officer, director, employee or agent by signing such consent or causing his signature to be affixed to such waiver by any reasonable means including but not limited to facsimile signature. If electronic, the transmission of the consent must be sent by electronic mail and set forth, or be submitted with, information from which it can reasonably be determined that the transmission was authorized by the member. This paragraph shall not be construed to alter or modify any provision in a certificate of incorporation not inconsistent with this chapter under which the written consent of less than all of the members is sufficient for corporate action. (b) Written or electronic consent thus given by all members entitled to vote shall have the same effect as a unanimous vote of members and any certificate with respect to the authorization or taking of any such action which is delivered to the department of state shall recite that the authorization was by unanimous written consent. (c) When there are no members of record, such action may be taken on the written consent signed by a majority in interest of the subscribers for capital certificates whose subscriptions have been accepted or their successors in interest or, if no subscription has been accepted, on the written consent signed by the incorporator or a majority of the

12 incorporators. When there are two or more incorporators, if any dies or is for any reason unable to act, the other or others may act. If there is no incorporator able to act, any person for whom an incorporator was acting as agent may act in his stead, or if such other person also dies or is for any reason unable to act, his legal representative may act Election and term of office of directors; alternates. (a) A corporation may provide in its certificate of incorporation or by-laws for directors to be elected or appointed at large, or by special districts or membership sections, or by virtue of their office or former office in the corporation or other entity, public or private, or by bondholders pursuant to paragraph (c) of section 506 (Bonds and security interests) voting as a class, or any combination thereof. (b) Directors shall be elected or appointed in the manner and for the term of office provided in the certificate of incorporation or the by-laws. The term of office of directors, other than those elected or appointed by virtue of their office or former office in the corporation or other entity, public or private, shall not exceed five years; and, if the board is classified under section 704 (Classification of directors), such term shall not exceed a number of years equal to the number of classes into which the board is classified. In the absence of a provision fixing the term, it shall be one year. (c) Each director shall hold office until the expiration of the term for which he is elected or appointed, and until his

13 successor has been elected or appointed and qualified. (d) If the certificate of incorporation or by-laws so provide, a special district or membership section entitled to elect or appoint one or more directors may elect or appoint an alternate for each such director. In the absence of a director from a meeting of the board, his alternate may, upon written notice to the secretary of the corporation, attend such meeting and exercise therein the rights, powers, and privileges of the absent director. When so exercising the rights, powers, and privileges of the absent director, such alternate shall be subject in all respects to the provisions of this chapter governing directors Removal of directors. (a) Except as limited in paragraph (c), any or all of the directors may be removed for cause by vote of the members, or by vote of the directors provided there is a quorum of not less than a majority present at the meeting of directors at which such action is taken. (b) Except as limited in paragraph (c), if the certificate of incorporation or the by-laws so provide, any or all of the directors may be removed without cause by vote of the members. (c) The removal of directors, with or without cause, as provided in paragraphs (a) and (b) is subject to the following: (1) In the case of a corporation having cumulative voting, no director may be removed when the votes cast against his removal would be sufficient to elect him if voted cumulatively at an election at which

14 the same total number of votes were cast and the entire board, or the entire class of directors of which he is a member, were then being elected; and (2) When by the provisions of the certificate of incorporation or the by-laws the members of any class or group, or the holders of bonds, voting as a class, are entitled to elect one or more directors, any director so elected may be removed only by the applicable vote of the members of that class or group, or the holders of such bonds, voting as a class. (d) An action to procure a judgment removing a director for cause may be brought by the attorney-general or by ten percent of the members whether or not entitled to vote. The court may bar from re-election any director so removed for a period fixed by the court Removal of officers. (a) Any officer elected or appointed by the board may be removed by the board with or without cause. An officer elected by the members or a class of members may be removed, with or without cause, only by the vote of the members or such class of members, but his authority to act as an officer may be suspended by the board for cause. (b) The removal of an officer without cause shall be without prejudice to his contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. (c) An action to procure a judgment removing an officer for cause may be brought by the attorney-general, by any director, by ten percent of the members, whether or not entitled to vote, or by the holders of ten

15 percent of the face value of the outstanding capital certificates, subvention certificates or bonds having voting rights. The court may bar from re-election or reappointment any officer so removed for a period fixed by the court.

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