Legal Rights of Members in a Non Profit by Gail Sessoms
What Is the Difference Between a Nonmembership & a Nonprofit?
The creators of a nonprofit organization choose a structure for governance of the organization when they create and file the articles of incorporation with the appropriate state agency. Formal membership nonprofits have a board of directors, and the members serve as the governing arm of the organization. The nonprofit’s bylaws and articles of incorporation define the rules for membership issues, such as how to become a member, and also detail the rights and responsibilities of members. State laws include provisions regulating the legal rights of nonprofit members.
Formal Membership Nonprofits
The members of a formal membership nonprofit have legal rights that are defined by the nonprofit’s governing documents and by state nonprofit laws. Formal membership nonprofits may representative organizations such as unions, civic organizations and professional associations or societies. The Model Nonprofit Corporation Act, created by the American Bar Association to provide consistency in nonprofit laws across in the country, includes provisions for the legal rights of members.
If a nonprofit organization chooses the membership structure, it agrees to abide by the laws and rules that govern the treatment of members. The formal membership nonprofit structure allows members to make major decisions, such as electing directors to the board, dissolution of the nonprofit or the sale of its major assets and amending the organization’s bylaws and articles of incorporation. Authority to make important operational decisions is usually granted to the nonprofit board. However, the organization and its board of directors are accountable to the members and are required to act in their best interests.
The articles of incorporation include the process by which individuals become members. The provision of the governing document authorizes or prohibits the transfer of membership and includes liability protections for members against the nonprofit organization’s acts or obligations. The articles of incorporation also provide for termination or suspension of membership and for the assessment and collection of dues and fees. Membership nonprofits often include in their articles provisions for the selection and responsibilities of delegates to represent the members.
Articles of incorporation require an annual meeting so members can attend and perform their governance responsibilities. The annual meeting provides a venue for members to learn about the nonprofit’s finances and vote on important matters. The articles can also require other meetings, such as quarterly, special or committee meetings. Members have a legal right to be notified of meetings. The governing documents detail the process required for notification, including timing of the notice and stating the purpose of the meeting. The rules specify how the notice is to be delivered to members.
Members have a legal right to vote on matters as provided for in the articles of incorporation, which include provisions for member voting rights. Nonprofits can choose to allow one vote for each member or base the weight of collective votes on membership levels or groups. The articles of incorporation define what constitutes a majority or a quorum, the use of written ballots, written consent and waivers, absentee voting, the use of proxies and validating voting results.
About the Author
Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.
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Original article link: http://smallbusiness.chron.com/legal-rights-members-non-profit-60011.html
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