Can the Same Person Be a Director and an Officer in a Nonprofit Corporation in California?
Full Question:
Answer:
The answer will depend in part on the terms in the bylaws. Any number of offices may be held by the same person unless the articles or bylaws provide
otherwise.
Please see the CA statutes below to determine applicability:
211. Bylaws may be adopted, amended or repealed either by approval
of the outstanding shares (Section 152) or by the approval of the
board, except as provided in Section 212. Subject to subdivision (a)
(5) of Section 204, the articles or bylaws may restrict or eliminate
the power of the board to adopt, amend or repeal any or all bylaws.
212. (a) The bylaws shall set forth (unless such provision is
contained in the articles, in which case it may only be changed by an
amendment of the articles) the number of directors of the
corporation; or that the number of directors shall be not less than a
stated minimum nor more than a stated maximum (which in no case
shall be greater than two times the stated minimum minus one), with
the exact number of directors to be fixed, within the limits
specified, by approval of the board or the shareholders (Section 153)
in the manner provided in the bylaws, subject to paragraph (5) of
subdivision (a) of Section 204. The number or minimum number of
directors shall not be less than three; provided, however, that (1)
before shares are issued, the number may be one, (2) before shares
are issued, the number may be two, (3) so long as the corporation has
only one shareholder, the number may be one, (4) so long as the
corporation has only one shareholder, the number may be two, and (5)
so long as the corporation has only two shareholders, the number may
be two. After the issuance of shares, a bylaw specifying or changing
a fixed number of directors or the maximum or minimum number or
changing from a fixed to a variable board or vice versa may only be
adopted by approval of the outstanding shares (Section 152);
provided, however, that a bylaw or amendment of the articles reducing
the fixed number or the minimum number of directors to a number less
than five cannot be adopted if the votes cast against its adoption
at a meeting or the shares not consenting in the case of action by
written consent are equal to more than 16 2/3 percent of the
outstanding shares entitled to vote.
(b) The bylaws may contain any provision, not in conflict with law
or the articles for the management of the business and for the
conduct of the affairs of the corporation, including but not limited
to:
(1) Any provision referred to in subdivision (b), (c) or (d) of
Section 204.
(2) The time, place and manner of calling, conducting and giving
notice of shareholders', directors' and committee meetings.
(3) The manner of execution, revocation and use of proxies.
(4) The qualifications, duties and compensation of directors; the
time of their annual election; and the requirements of a quorum for
directors' and committee meetings.
(5) The appointment and authority of committees of the board.
(6) The appointment, duties, compensation and tenure of officers.
(7) The mode of determination of holders of record of its shares.
(8) The making of annual reports and financial statements to the
shareholders.
305. (a) Unless otherwise provided in the articles or bylaws and
except for a vacancy created by the removal of a director, vacancies
on the board may be filled by approval of the board (Section 151) or,
if the number of directors then in office is less than a quorum, by
(1) the unanimous written consent of the directors then in office,
(2) the affirmative vote of a majority of the directors then in
office at a meeting held pursuant to notice or waivers of notice
complying with Section 307 or (3) a sole remaining director. Unless
the articles or a bylaw adopted by the shareholders provide that the
board may fill vacancies occurring in the board by reason of the
removal of directors, such vacancies may be filled only by approval
of the shareholders (Section 153).
(b) The shareholders may elect a director at any time to fill any
vacancy not filled by the directors. Any such election by written
consent other than to fill a vacancy created by removal, which
requires the unanimous consent of all shares entitled to vote for the
election of directors, requires the consent of a majority of the
outstanding shares entitled to vote.
(c) If, after the filling of any vacancy by the directors, the
directors then in office who have been elected by the shareholders
shall constitute less than a majority of the directors then in
office, then both of the following shall be applicable:
(1) Any holder or holders of an aggregate of 5 percent or more of
the total number of shares at the time outstanding having the right
to vote for those directors may call a special meeting of
shareholders, or
(2) The superior court of the proper county shall, upon
application of such shareholder or shareholders, summarily order a
special meeting of shareholders, to be held to elect the entire
board. The term of office of any director shall terminate upon that
election of a successor.
The hearing on any application filed pursuant to this subdivision
shall be held on not less than 10 business days notice to the
corporation. If the corporation intends to oppose the application, it
shall file with the court a notice of opposition not later than five
business days prior to the date set for the hearing. The application
and any notice of opposition shall be supported by appropriate
affidavits and the court's determination shall be made on the basis
of the papers in the record; but, for good cause shown, the court may
receive and consider at the hearing additional evidence, oral or
documentary, and additional points and authorities. The hearing shall
take precedence over all other matters not of a similar nature
pending on the date set for the hearing.
(d) Any director may resign effective upon giving written notice
to the chairman of the board, the president, the secretary or the
board of directors of the corporation, unless the notice specifies a
later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected
to take office when the resignation becomes effective.
305. (a) Unless otherwise provided in the articles or bylaws and
except for a vacancy created by the removal of a director, vacancies
on the board may be filled by approval of the board (Section 151) or,
if the number of directors then in office is less than a quorum, by
(1) the unanimous written consent of the directors then in office,
(2) the affirmative vote of a majority of the directors then in
office at a meeting held pursuant to notice or waivers of notice
complying with Section 307 or (3) a sole remaining director. Unless
the articles or a bylaw adopted by the shareholders provide that the
board may fill vacancies occurring in the board by reason of the
removal of directors, such vacancies may be filled only by approval
of the shareholders (Section 153).
(b) The shareholders may elect a director at any time to fill any
vacancy not filled by the directors. Any such election by written
consent other than to fill a vacancy created by removal, which
requires the unanimous consent of all shares entitled to vote for the
election of directors, requires the consent of a majority of the
outstanding shares entitled to vote.
(c) If, after the filling of any vacancy by the directors, the
directors then in office who have been elected by the shareholders
shall constitute less than a majority of the directors then in
office, then both of the following shall be applicable:
(1) Any holder or holders of an aggregate of 5 percent or more of
the total number of shares at the time outstanding having the right
to vote for those directors may call a special meeting of
shareholders, or
(2) The superior court of the proper county shall, upon
application of such shareholder or shareholders, summarily order a
special meeting of shareholders, to be held to elect the entire
board. The term of office of any director shall terminate upon that
election of a successor.
The hearing on any application filed pursuant to this subdivision
shall be held on not less than 10 business days notice to the
corporation. If the corporation intends to oppose the application, it
shall file with the court a notice of opposition not later than five
business days prior to the date set for the hearing. The application
and any notice of opposition shall be supported by appropriate
affidavits and the court's determination shall be made on the basis
of the papers in the record; but, for good cause shown, the court may
receive and consider at the hearing additional evidence, oral or
documentary, and additional points and authorities. The hearing shall
take precedence over all other matters not of a similar nature
pending on the date set for the hearing.
(d) Any director may resign effective upon giving written notice
to the chairman of the board, the president, the secretary or the
board of directors of the corporation, unless the notice specifies a
later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected
to take office when the resignation becomes effective.
307. (a) Unless otherwise provided in the articles or, subject to
paragraph (5) of subdivision (a) of Section 204, in the bylaws, all
of the following apply:
(1) Meetings of the board may be called by the chair of the board
or the president or any vice president or the secretary or any two
directors.
(2) Regular meetings of the board may be held without notice if
the time and place of the meetings are fixed by the bylaws or the
board. Special meetings of the board shall be held upon four days'
notice by mail or 48 hours' notice delivered personally or by
telephone, including a voice messaging system or by electronic
transmission by the corporation (Section 20). The articles or bylaws
may not dispense with notice of a special meeting. A notice, or
waiver of notice, need not specify the purpose of any regular or
special meeting of the board.
(3) Notice of a meeting need not be given to a director who
provides a waiver of notice or a consent to holding the meeting or an
approval of the minutes thereof in writing, whether before or after
the meeting, or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to that director.
These waivers, consents and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
(4) A majority of the directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than 24 hours, notice of an
adjournment to another time or place shall be given prior to the time
of the adjourned meeting to the directors who were not present at
the time of the adjournment.
(5) Meetings of the board may be held at a place within or without
the state that has been designated in the notice of the meeting or,
if not stated in the notice or there is no notice, designated in the
bylaws or by resolution of the board.
(6) Members of the board may participate in a meeting through use
of conference telephone, electronic video screen communication, or
electronic transmission by and to the corporation (Sections 20 and
21). Participation in a meeting through use of conference telephone
or electronic video screen communication pursuant to this subdivision
constitutes presence in person at that meeting as long as all
members participating in the meeting are able to hear one another.
Participation in a meeting through electronic transmission by and to
the corporation (other than conference telephone and electronic video
screen communication), pursuant to this subdivision constitutes
presence in person at that meeting if both of the following apply:
(A) Each member participating in the meeting can communicate with
all of the other members concurrently.
(B) Each member is provided the means of participating in all
matters before the board, including, without limitation, the capacity
to propose, or to interpose an objection to, a specific action to be
taken by the corporation.
(7) A majority of the authorized number of directors constitutes a
quorum of the board for the transaction of business. The articles or
bylaws may not provide that a quorum shall be less than one-third
the authorized number of directors or less than two, whichever is
larger, unless the authorized number of directors is one, in which
case one director constitutes a quorum.
(8) An act or decision done or made by a majority of the directors
present at a meeting duly held at which a quorum is present is the
act of the board, subject to the provisions of Section 310 and
subdivision (e) of Section 317. The articles or bylaws may not
provide that a lesser vote than a majority of the directors present
at a meeting is the act of the board. A meeting at which a quorum is
initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at
least a majority of the required quorum for that meeting.
(b) An action required or permitted to be taken by the board may
be taken without a meeting, if all members of the board shall
individually or collectively consent in writing to that action and if
the number of members of the board serving at the time constitutes a
quorum. The written consent or consents shall be filed with the
minutes of the proceedings of the board. For purposes of this
subdivision only, "all members of the board" shall include an
"interested director" as described in subdivision (a) of Section 310
or a "common director" as described in subdivision (b) of Section 310
who abstains in writing from providing consent, where the
disclosures required by Section 310 have been made to the
noninterested or noncommon directors, as applicable, prior to their
execution of the written consent or consents, the specified
disclosures are conspicuously included in the written consent or
consents executed by the noninterested or noncommon directors, and
the noninterested or noncommon directors, as applicable, approve the
action by a vote that is sufficient without counting the votes of the
interested or common directors. If written consent is provided by
the directors in accordance with the immediately preceding sentence
and the disclosures made regarding the action that is the subject of
the consent do not comply with the requirements of Section 310, the
action that is the subject of the consent shall be deemed approved,
but in any suit brought to challenge the action, the party asserting
the validity of the action shall have the burden of proof in
establishing that the action was just and reasonable to the
corporation at the time it was approved.
(c) This section applies also to committees of the board and
incorporators and action by those committees and incorporators,
mutatis mutandis.
312. (a) A corporation shall have a chairman of the board or a
president or both, a secretary, a chief financial officer and such
other officers with such titles and duties as shall be stated in the
bylaws or determined by the board and as may be necessary to enable
it to sign instruments and share certificates. The president, or if
there is no president the chairman of the board, is the general
manager and chief executive officer of the corporation, unless
otherwise provided in the articles or bylaws. Any number of offices
may be held by the same person unless the articles or bylaws provide
otherwise.
(b) Except as otherwise provided by the articles or bylaws,
officers shall be chosen by the board and serve at the pleasure of
the board, subject to the rights, if any, of an officer under any
contract of employment. Any officer may resign at any time upon
written notice to the corporation without prejudice to the rights, if
any, of the corporation under any contract to which the officer is a
party.
