Legal Question in Business Law in California

We are a non profit 501.3(c) youth soccer organization and I need help interpreting the following: In our bylaws in the section "Membership", General Membership and Qualifications, it reads: The corporation shall have no members withi the meaning of Section 5056 of the California Corporations Code as now in effect or as may hereafter be amended. Any action which otherwise would require approval by a majority of all members or approval by the members shall require approval on of the Board of Directors. All rights whcih otherwise would vest in the members including, without limitation, the right to elect Directors, shall vest in the Board.

Does that mean members are our families in the organization or the just the members on the Board of Directors?


Asked on 1/28/12, 12:35 pm

2 Answers from Attorneys

Just the members on the board. Non-profit corporations in California, and most of the U.S., come in two "flavors," membership organizations and non-membership organizations. This goes for all non-profits, not just charitable 501(c)3 organizations. Because non-profits do not have shareholders, they have to be organized a little differently. Some behave more like regular corporations, in that everyone who meets the requirements for membership have a say in how the organization is run. Examples are the Sierra Club, REI, Consumers Union (Consumer Reports), and the Automobile Club of Southern California. Others have purposes that do not lend themselves to such broad democratic control, or have memberships that are too variable to be viably run by a democracy of the members. Those may have "members" but they are not legal members. The board is the only embodiment of the organization, and makes all decisions, including admitting and removing directors and controlling the size of the board. Examples are most arts organizations, such as the San Francisco Opera, and most charitable foundations, such as the Red Cross. This is the form your club has, based on the clause you have quoted.

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Answered on 1/29/12, 3:47 pm
Bruce Beal Beal Business Law

Simply put, if the Bylaws do not provide for members (similar to shareholders in a corporation), there are none, and the "members" (as you say) of the Board of Directors completely control the organization. I organize non-member non-profits probably most of the time.

Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at [email protected].

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Answered on 1/30/12, 9:31 am


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