The Governor’s Stay at Home Order is now extended through April 30. Many nonprofit organizations will, at a minimum, need to conduct essential functions and board business during this time. How can this task be accomplished? Fortunately, Michigan nonprofit law provides options.
Remote Meetings: Unless prohibited in a nonprofit organization’s articles or bylaws, Michigan nonprofit law provides methods for both directors and members of a nonprofit to participate in meetings remotely. A director of a nonprofit organization or a member of a committee of the board of directors may participate in a meeting by means of conference telephone or other means of remote communication if all individuals who are participating in the remote meeting can communicate with the other participants. Participation in a board or committee meeting remotely constitutes attendance in person at the meeting. Similarly, a member of a nonprofit corporation may participate in an annual or special membership meeting by conference telephone or other means of remote communication if all participants can communicate with all the other participants. All participants in the meeting must be advised of the means of remote communication used. Members that participate remotely are considered present, in person at the meeting, and can vote if the organization implements reasonable measures (1) to verify each participant is a member, (2) to provide each participant with the opportunity to participate in the meeting and vote on matters, including the opportunity to read or hear the proceedings of the meeting concurrently with the proceedings, and (3) to record, and maintain a record of, any vote or actions taken at the meeting.
Board and/or Member Action Without a Meeting: Unless, prohibited in a nonprofit’s articles or bylaws, any action that can be voted on at a meeting of the board of directors (or a committee of the board) may be taken without a meeting if all members of the board then in office or of the committee consent to the action in writing or by electronic transmission. Additionally, if provided in the organization’s articles or bylaws any action permitted to be taken at an annual or special meeting of members, including electing directors, may be taken without a meeting with a ballot vote or via an electronic or online voting place. In this situation Michigan nonprofit law sets forth the guidelines for a ballot or online vote if the organization’s governing documents provide the authority to act in this manner. Furthermore, if a nonprofit organization’s articles provide, a nonprofit may take any action that is permitted to be taken at a membership meeting without a meeting, notice or a vote, as long as written consents, setting forth the action taken, are signed and dated by the number of members having not less than the minimum number of votes that are necessary to take the action at a meeting at which all members entitled to vote on the action were present and voted. For nonprofit organizations with numerous members (i.e. trade groups or large homeowner associations) this could be a very burdensome process. It is interesting to note that directors of a Michigan nonprofit organization cannot vote via email. A unanimous consent may be sent via email and signed by each director, but email voting by directors is not permitted by Michigan nonprofit law.
Delaying Annual Meetings: Michigan nonprofit law also provides flexibility with respect to delaying annual meetings of members and the election of directors as long as the annual meeting is held within 90 days of the original meeting date or not more than 15 months after the last annual meeting. In fact, even if a nonprofit organization postpones an annual meeting of members, such postponement will not affect otherwise valid corporate acts of the organization.
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