Nonprofit Corporations

Management

Members

There is no requirement that a nonprofit corporation have members. If members are provided for, they may be legal (voting) members or non-voting members. The bylaws of the corporation describe the requirements for becoming a member and related matters such as the application process, any dues requirement, meetings and voting procedures, and removal or termination of membership.

If there are no voting members, all policy decisions are made by the board of directors.

Directors

The directors set major policy of the corporation but, in this capacity, do not operate the business on a daily basis. Directors may have regularly scheduled meetings to approve or authorize actions by the officers or call special meetings for this purpose. A nonprofit corporation generally cannot have just a single director.

As with a regular business corporation, most states allow dispensing with formal meetings of directors and preparing written minutes authorizing or approving actions that are signed by the directors. No notices of meetings or actual meetings or formal votes are required.

Nonprofit corporation laws usually contain strict requirements and restrictions for any transactions between a director and the corporation where a director would be compensated or profit from the transaction other than any reasonable compensation for acting as a director.

Officers

Every state requires at least a president and secretary and most every state requires a treasurer or chief financial officer as well. While one person may fill more than one office position as in a business corporation, a single person generally cannot fill every office in a nonprofit corporation.

As in a business corporation, the principal officers run the corporation on a day to day basis. They are responsible for the hiring and firing and supervision of employees and other responsibilities of running the business, all in accordance with any parameters set by the board of directors.  Officers are usually appointed by the board, not elected, as serve until they resign, die, or are removed by the board.


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