We have a 501(c)(7) social club considering sale of our building, our only major asset. Our bylaws state: "A sale or disposition of substantially all of the property and assets of the Club, or the dissolution of the Club, shall require the affirmative vote of three-fourths (3/4) of the [voting members], in accordance with Article XVII, Section 2 [voting eligibility] of these Bylaws" Does that mean that 3/4 of the voting membership must vote in the affirmative to sell the club, or would it just be 3/4 of the those voting in a duly convened meeting? If we have 100 members, must 75 vote affirmatively, or if just 50 constitute a quorum and show up at the meeting, can 38 of them vote to dissolve the club?
Good question. Now you know why it is important to have clear bylaws. Many people don’t bother to look at the bylaws unless something controversial is about to be considered, and then you want a clear answer. This is obviously one of those times.
I am afraid I can’t answer your question definitively because you may have changed the answer by your paraphrase of the words within the brackets in “three-fourths of the [voting members].” Does that phrase talk about the members eligible to vote pursuant to the section on eligibility? Or does it talk about the members actually voting. It clearly makes a difference, as your question so nicely illustrates.
If there is no default requirement in your state nonprofit corporation law, I would guess that the vote requires three-fourth of all members eligible to vote. But I can’t tell without seeing the actual wording and the context of the rest of the bylaws. Many organizations require a super-majority for important actions, but often only a super-majority of a quorum. If a quorum is a half of those eligible to vote, you could pass a major change with three-fourths or two-thirds of the half, which is still less than half of the total membership. What you really want is an important issue to consider as you write or review your bylaws.
For more discussion of this kind of issue, so that you can eliminate ambiguity and reduce the risks of litigation, participate in our bylaw webinar “Bylaws: The Constitution of Nonprofits – The Art and Science of Making Them Work,” on February 20. We will review a whole range of procedures that can be written clearly to avoid controversy and stay out of court.
Thank you! I bracketed [voting members] as there is a class of associate members without voting rights and so the phrase refers to another section of the by-laws which differentiates the two classes.
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