The non-profit corporation I'm involved with was involuntarily dissolved in July of 2007 after not receiving and completing the required report from the state of Texas...the last known address of the representative was wrong and nobody knew to change it. In 2008 we were reinstated as a non-profit under the same name, but then we completed steps to change our name with an article of amendment. We also took the opportunity to revise the old bylaws of the corporation, making sure to let all members know of the plan and having a membership meeting so that everyone could have input. Now, we are being threatened with a lawsuit by a member, who hasn't paid his dues for the current year, because we refuse to comply with the old bylaws and reimburse him for his membership. Does he have a leg to stand on if he does sue?
The first question is whether or not amendment of the bylaws was proper under
Texas corporate law. Sec. 22.102. of the Texas Corp Code states, "(c) The
board of directors may amend or repeal the bylaws, or adopt new bylaws,
unless:
(1) this chapter or the corporation's certificate of formation wholly or
partly reserves the power exclusively to the corporation's members;
(2) the management of the corporation is vested in the corporation's members;
or
(3) in amending, repealing, or adopting a bylaw, the members expressly
provide that the board of directors may not amend or repeal the bylaw."
Thus, the board of directors has the authority to change the bylaws. Did you
follow all the steps necessary for action by the board of directors (i.e.,
proper notice of meeting and written resolutions or, in lieu thereof, a
consent of all directors)? You should have a lawyer look over your bylaws
(old and new), articles of incorporation, and corporate minute book to give
you an opinion on the issue.
BizResearcher | Window Shopper |
6/9/2010 - 11:53 am
You need to talk to an attorney that specializes in Texas business law. Because the original non-profit was administratively dissolved, it no longer exists, so he may not have a case. However, he might try to say that the board of directors should not have allowed the original non-profit to be dissolved and they were negligent - you really need in-put from an attorney.
jjray | Window Shopper | 9/19/2012 - 1:32 pm
Texas corporate law. Sec. 22.102. of the Texas Corp Code states, "(c) The
board of directors may amend or repeal the bylaws, or adopt new bylaws,
unless:
(1) this chapter or the corporation's certificate of formation wholly or
partly reserves the power exclusively to the corporation's members;
(2) the management of the corporation is vested in the corporation's members;
or
(3) in amending, repealing, or adopting a bylaw, the members expressly
provide that the board of directors may not amend or repeal the bylaw."
Thus, the board of directors has the authority to change the bylaws. Did you
follow all the steps necessary for action by the board of directors (i.e.,
proper notice of meeting and written resolutions or, in lieu thereof, a
consent of all directors)? You should have a lawyer look over your bylaws
(old and new), articles of incorporation, and corporate minute book to give
you an opinion on the issue.
BizResearcher | Window Shopper | 6/9/2010 - 11:53 am
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