Nonprofit Law/Board resignation

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Question
QUESTION: We have had some serious issues with our youth sports board.  This is an NC non profit.  They have completely ignored the bylaws, doing what they want.  Spent money on things that don't further our purpose,  Never asked the rest of the board for approval to spend money etc.  A petition asked for a new election,  They refused.  Then there were several negotiations via e mail.  We asked that the board members responsible for the mess to resign.  They did so at the last meeting, verbally.  They never turned over keys, bank accounts etc.  Today, we find out they have called a Board meeting for this week.  How can they do this if they resigned and where do we go from here?  They signed the back of the e mail where we demanded them to resign and said that showed that they agreed to the terms.

ANSWER: I am assuming from what you wrote that your organization is a North Carolina Nonprofit Corporation. Chapter 55A of the North Carolina Code, the North Carolina Nonprofit Corporation Act, on the law.onecle.com site is available
at http://goo.gl/lghKg

You may find many of the laws that would be interesting, but I especially want to point out
55A-8-07 which provides:
--- End of Excerpt ---
(a)        A director may resign at any time by communicating his resignation to the board of directors, its presiding officer, or to the corporation.

--- End of Excerpt ---

It is not clear from what you wrote whether the board members communicated that writing, which was on the back of an email, "to the board of directors, its presiding officer, or to the corporation".

I am also assuming that by "we" you are referring to voting members of the corporation. If any of my assumptions are not correct and you want to ask a follow-up question, please correct me in that follow-up question.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    




---------- FOLLOW-UP ----------

QUESTION: Yes, this I an Nc non profit corporation.  The board members didn't really communicate anything on the email.  The e  e mail had our demands to settle this without getting courts, police or Secretary of Sate involved.  All they did was sign the back of the printed e mail, said they were resigning and left.

What can we (the voting members) do now that they are trying to act like they never resigned?  Who do we contact?  Must we hire a lawyer?  Who should we contact about them not following by laws and spending money with board approval and on things not league related?  

Thank you so much for the help.  We want to be sure of where we stand but have little cash to work with.

Answer
First you need to consider your articles of incorporation and bylaws as they may have relevant provisions as to removal of directors and for elections.

In any case 55A-7-01 provides that the must be a meeting of members at least annually.
You wrote that they are not following the bylaws, but that is vague.  If there is a serious violation that effects the members' rights then members may file a derivative action in court, as specified in 55A-7-40

--- Start of Excerpt ---
(a)        An action may be brought in a superior court of this State, which shall have exclusive original jurisdiction over actions brought hereunder, in the right of any domestic or foreign corporation by any member or director, provided that, in the case of an action by a member, the plaintiff or plaintiffs shall allege, and it shall appear, that each plaintiff-member was a member at the time of the transaction of which he complains.

(b)        The complaint shall allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and the reasons for the plaintiff's failure to obtain the action or for not making the effort.  Whether or not a demand for action was made, if the corporation commences an investigation of the charges made in the demand or complaint, the court may stay any proceedings until the investigation is completed.
--- End of Excerpt ---

As for the corporation spending funds for purposes other than what the voters want, that is not, in itself, a violation of the law, unless there is a specific limitation in the articles of incorporation or bylaws. General purposes do not limit the activities of a nonprofit corporation. See 55A-3-01 " Every corporation incorporated under this Chapter has the purpose of engaging in any lawful activity unless a more limited purpose is set forth in its articles of incorporation."

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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