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How can you dissolve a membership corporation without members?

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How can you dissolve a membership corporation without members?

The bylaws of a nonprofit corporation state that it is a membership corporation that requires a membership vote to dissolve, but as a practical matter it stopped operating a number of years ago and has no current members. How do the 3 remaining trustees go about dissolving the corporation?

This is not an unusual situation and your state nonprofit corporation law probably gives a pathway on which to proceed.  The Pennsylvania Nonprofit Corporation Law says, for example, that when there are no members in fact, the directors or trustees have all the power to act for the corporation.  If that is the situation in your state, the trustees could act alone to dissolve the corporation.

Even without such a provision, how do individuals become members of the corporation?  Can the three trustees become members, and as the only members of the corporation proceed to vote for dissolution?

If all else fails, they could probably get a court to approve the dissolution, but the course is probably set out in the statute, which provides procedures that supplement and override the bylaws.

Sunday, August 23, 2009

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