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Nonprofit Law/NY non-profit law and removing a President from office

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QUESTION: The President of our board has an investigation pending with the Attorney General's office for embezzlement and a complaint has been filed with the tax department for taking kickbacks.  In the meantime, he continues to physically hold the check book as all of the board members have resigned and nothing can be done pending the lengthy outcome of the investigation. He has not followed the bylaws and will not resign from office.  Members are frustrated and board members have left office.  How much weight/efficacy does petitioning hold to remove him from office?  We are beginning a social media campaign and educating the membership on non-profit law however, many of our community members are fearful, non educated on non-profit law or see this as "Founder's Syndrome" and turn their heads.  Is there another way to remove him from office?

ANSWER: Before I could answer I would need to know from you whether the entity is a New York incorporated Not-for-Profit Corporation.  If not, what is it?  Also I would need to know whether the Certificate of Incorporation or Bylaws give the right to vote for Board members to anyone other than the existing Board members at the time of the vote. After you give me that information I will reply further.

Harvey Mechanic
Attorney at Law
Member of New York Bar
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, it is incorporated.  The bylaws were recently changed to state:
The Voting membership status shall be extended to all riders and parents who are in good standing with the purpose and guidelines of this organization, USABMX and meet the following criteria:
Must be 18 years of age
Must attend three out of four consecutive board meetings
Must volunteer at one track function per week, at least six weeks, out of twelve consecutive week period.
Individuals meeting the above criteria will be elected by the executive board and current voting membership.

Answer
Those bylaws do not appear to have been written well.  First they state "Voting membership status shall be extended to all riders and parents who are in good standing..." which appears to be automatic, if all of the qualifications are met, but then at the end we see, "Individuals meeting the above criteria will be elected by the executive board and current voting membership."

So my next question is whether anyone has been elected as such a voting member?  If so, those persons would have standing to petition the court in the county where the organization is operating, for the court to take over the operation of the organization. However, that would prove to be somewhat expensive.  Why don't some of the concerned members get a petition going and get as many signatures (with names and addresses typed out) requesting the Attorney General's Office to act quickly to remove the present Director and allow replacements to come in.  You wrote that already the State's Attorney General's office is investigating.

The New York Not-for-Profit Corporation Law is available at
http://law.justia.com/codes/new-york/2013/npc updated to 2013 and specifically 1202(a)(3) gives that Attorney General authority to petition a court.
http://law.justia.com/codes/new-york/2013/npc/article-12/1202/

Further, under 112(a)(4), "The  attorney-general  may  maintain  an  action  or  special
 proceeding... [t]o procure a judgment removing a director of  a  corporation  for
 cause under section 706 (Removal of directors)...
http://law.justia.com/codes/new-york/2013/npc/article-1/112/

http://www.charitiesnys.com/contact_new.jsp gives the contact infomration for the New York State Attorney General's Charities Bureau.

Harvey Mechanic
Attorney at Law
Member of New York Bar
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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