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May president deny veep financial information?

Your Legal Questions Answered

May president deny veep financial information?

I'm on the board of a 501(c)(3) nonprofit corporation and all three directors have equal voting rights. The president has changed bank account information and locked me (the Vice President) out of all internal information. Is this legal?

No.  As an officer and director you have a right to the financial information about the corporation.  You can’t fulfill your fiduciary duty without it.

Check your state nonprofit corporation law.  It may include specific procedures about how to obtain production of the records.  If the president will not comply voluntarily, and if you have the support of the others on the board, you may want to consider removing the president from office, which can normally be done whenever the directors believe it to be in the best interests of the corporation, even if you don’t want to remove the president from the board, which may require a greater cause.  (If you use our form of bylaws, you can remove a director with or without cause by the vote of a majority of the other directors after the opportunity for a hearing.  It is a very important right. (See Ready Reference Page: “Bylaws Function as Constitution of Nonprofit Corporations”))

Tuesday, January 28, 2014

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