Wednesday, March 1, 2017

Non-profit Series: 5. What Happens at Meetings?

Written by Sagan L. Carman-Downer

There are a few different types of meetings that can be held by a nonprofit corporation. Some meetings are required under state law, and others can be held at the discretion or need of the corporation.

The first meeting that will be held will be an organizational meeting. This meeting is typically held after the articles of incorporation are signed and filed with the State. This meeting is held by the initial directors if they are named in the articles of incorporation, or by the individuals that started the corporation if there were no directors named in the articles of incorporation. The purpose of this meeting is to elect directors (if there are none yet), appoint officers and adopt bylaw. Other matters can be addressed at the meeting as necessary.

Corporations are typically also required to have annual meetings. The time and place of these regular annual meetings should be stated in the bylaws. The directors, officers and members are all invited to attend the annual meeting. At this meeting, the president and treasurer will report on the activities of the corporation and the financial condition of the corporation. Other matters that will usually be addressed include re-electing directors and officers if their term has expired (the term of directors and officers should be set in the articles of incorporation or bylaws). Past and future activities of the corporation will also be discussed at these meetings, and decisions can be made about what activities or transactions the corporation will pursue. What actions the corporation takes will be determined by taking a vote of the directors or members. Whether the directors or members are authorized to vote will depend on the proposed action and any provisions included in the articles of incorporation or bylaws specifying voting authority. For example, state law may require that some actions be authorized a two-thirds majority vote in favor by the directors, or the bylaws may provide that certain actions can be authorized by a 51% vote in favor by the members.

Additional meetings, usually called special meetings, can also be conducted in between annual meetings. These meetings are usually held when the corporation needs to make decisions about whether to engage in activities that need to be addressed before the next scheduled annual meeting. To hold special meetings, there must be proper notice provided to those that are allowed to attend. This notice must include the purpose of the meeting (what will be discussed), and the time and place of the meeting. There are usually specific requirements regarding how far in advance of the meeting notice must be provided. This will depend on state law, so it is important to make sure you check your state’s requirements to make sure you provide adequate notice.

Meetings are where individuals involved in non-profit corporations make decisions about what activities they will pursue and how they will spend their money to further their purpose. Annual meetings provide an opportunity to have regular updates about how the corporation is performing. When matters come up throughout the year that need to be addressed before the next annual meeting, corporations can use special meetings to address those things, but they need to ensure that proper notice is provided.

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