WHAT ARE MEMBERS OF A NONPROFIT? MEMBERS OF NONPROFIT EXPLAINED | NON-PROFIT ORGANIZATION #LAWFIRM

IN THIS VIDEO WE DISCUSS, WHAT ARE MEMBERS OF A NONPROFIT? MEMBERS OF NONPROFIT EXPLAINED | NON-PROFIT ORGANIZATION #LAWFIRM

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WHAT ARE MEMBERS OF THE NONPROFIT PUBLIC BENEFIT CORPORATION?

Membership for a Nonprofit Public Benefit Corporation is optional. The reasons for providing membership in a nonprofit include: (1) Attract funds through membership, or (2) Establish support in the community. However, many administrative burdens are associated with forming a membership organization and it is more common for a nonprofit to not have members.

If the nonprofit includes membership, the Bylaws must address the controlling provisions for membership such as qualifications, method of selection, expulsion, dues and fees, notice and frequency of meetings, the number required for a quorum to make decisions, and the number of votes required to order action on a matter. The Public Benefit Corporation may also create different classes of membership, which may be offered to individuals or corporate entities. Based on the provisions in the Bylaws, the members may have voting and statutory rights or they may simply be donors who have only honorary membership without any voting and statutory rights. In California, members have statutory legal rights when they possess voting power on electing directors or on how the charity’s assets will be disposed upon dissolution, merger, or conversion. Pursuant to California law, voting members have the right to inspect corporate records, elect and remove directors, receive notice of meetings, and they may sue the directors in a derivative action or third-parties on behalf of the nonprofit corporation. These statutory rights can be enforced in civil court actions. In addition, classes of voting members cannot be abolished without their consent, and also their voting rights cannot be changed without notice, due process, and consent.

As a practicality, the nonprofit corporation should maintain an alphabetized list of its members, including their name, address, class of membership, and applicable membership dues.