Legal Question in Business Law in Maryland
amending bylaws if you CANNOT achieve a majority?
HYPO: A church wants to provide housing to the indigent, so they partnery w/ an existing housing org. and form a nonprofit corp. Conflict ensues and church terminates housing org. However, housing org's name remains in the bylaws, in the charter, and they have members on the board. Church wants to amend documents to remove the housing org's name, but will never be able to achieve necessary majority since they sit on the board. Any suggestions or existing caselaw??
2 Answers from Attorneys
Re: amending bylaws if you CANNOT achieve a majority?
There is a disconnect in your pattern. You state church terminates housing org. and then wants to change documents. Do you mean they terminated relationship? Do I assume non-profit has housing org's name in it as well as church? Best idea may be to terminate non-profit and start over. Other choice negotiate disentanglement.
Re: amending bylaws if you CANNOT achieve a majority?
The word partnership can be tricky because in general it applies to a for-profit venture. Your fact pattern, however, sounds like a new organization was created where the housing group's name was used and both the church and older housing group own the new entity with board members of the new organization being provided by the older housing organization and the church. The church wishes to basically take over the shares of the new organization and remove all memories of that organization. The most direct and less messy way to discontinue this union is to totally dissolve the organization. When that happens, no more name problems or board problems.
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