I am the founder of a new nonprofit cat rescue and was reading your view that founders can protect themselves by claiming to be a sole member and include that in their bylaws. (Ready Reference Page: “Sole Member Bylaws Can Protect Founder of Nonprofit”) Do you know if this is legal in my state? Everything I read says I have to have at least three unrelated members. This is my passion and I can't take the chance that someone could take it away from me.
I think you are confusing “members” of the corporation, who are analogous to shareholders of a business corporation, with members of the board who are the directors of the corporation. Your state nonprofit corporation law specifically talks about having shareholders or members of a nonprofit corporation, and I don’t see any requirement to have at least three members. (New York does require a minimum of three individuals or an entity controlled by at least three persons to serve as the members of a not-for-profit corporation, but I am not aware of any other state law that requires it.)
Your state’s statute does say that the corporation must have at least three directors (who are not required to be unrelated) to serve on the governing body, but also says that those directors may be elected by and removed by the members. It is the power of the founder to be the sole member and elect and remove directors that provides the assurance that the corporation can pursue its original mission and vision. Get help from a local lawyer who understands the law to help you set it up properly for your purposes.
I was under the understanding in my state that you had to have at least three board members that are not related to to me. How do I check to see if that's the true law?
Check the nonprofit corporation law of your state or ask an attorney who understands the nonprofit corporation law of your state.
Add new comment