REPRESENTING
THE
NONPROFIT
ORGANIZATION
MARILYN E. PHELAN
Professor of Law
Texas Tech University School of Law
8
Callaghan
CALLAGHAN & COMPANY
3201 Old Glenview Road/Wilmette, Illinois 60091
TABLE OF CONTENTS*
CHAPTER
§ 1:01.
§ 1:02.
§ 1:03.
§ 1:04.
§ 1:05.
§ 1:06.
§ 1:07.
§ 1:08.
§ 1:09.
§ 1:10.
§ 1:11.
§ 1:12.
§ 1:13.
§ 1:14.
§ 1:15.
§ 1:16.
§ 1:17.
§ 1:18.
§ 1:19.
§ 1:20.
§ 1:21.
§ 1:22.
§ 1:23.
§ 1:24.
§ 1:25.
§ 1:26.
§ 1:27.
§ 1:28.
CHAPTER
§ 2:01.
§ 2:02.
1 Creation of a Nonprofit Corporation
Organization of a Nonprofit Corporation.
Articles of Incorporation.
-Form for Articles of Incorporation.
-Purpose Clause.
Corporate Name.
-Form for Application for Reservation of Corporate Name.
Registered Office and Agent.
-Form for Statement of Change of Registered Office or
Registered Agent, or Both.
Incorporators.
Organizational Meeting.
Bylaws.
-Form for Bylaws.
Corporate Minutes.
-Form for Corporate Minutes.
Powers of a Nonprofit Corporation.
Defense of Ultra Vires.
Procedures To Amend Articles of Incorporation.
-Articles of Amendment.
-Form for Articles of Amendment.
Authorization To Do Business in Another State.
-Certificate of Authority.
-Form for Application for Certificate of Authority.
Books and Records.
Benefits to Members.
Licenses and Permits.
-Permits for Charitable Solicitations.
Obtaining Tax Exempt Status.
Checklist of Points To Remember.
2
Members and Directors of a Nonprofit Corporation
Members.
-Meetings.
*The material in this book was previously published in Nonprofit Enterprises: Law and Taxation (1987) by Marilyn E. Phelan
vi
Table of Contents
§ 2:03. -Notice of Members' Meetings.
§ 2:04. --Form of Notice of Meeting of Members.
§ 2:05. --Form of Notice of Special Meeting.
§ 2:06. -Right To Vote .
§ 2:07. -Voting by Proxy.
§ 2:08. --Form of Proxy.
§ 2:09. -Right of Members To Inspect Books and Records.
§ 2:10. -Derivative Actions of Members.
§ 2:11. -Removal of Members.
§ 2 :12. Directors.
§ 2:13. -Election of Directors.
§ 2 :14. -Meetings of Directors.
§ 2:15. -Management of Affairs of a Nonprofit Corporation.
§ 2:16. -Action of the Board of Directors.
§ 2:17. -Removal of Director.
§ 2:18. Checklist of Points To Remember.
CHAPTER
§ 3:01.
§ 3:02.
§ 3:03.
§ 3:04.
§ 3 :05.
§ 3:06.
§ 3:07.
§ 3:08.
§ 3:09.
§ 3:10.
§ 3:11.
§ 3:12.
§ 3:13.
§ 3:14.
§ 3:15.
§ 3:16.
§ 3:17.
§ 3:18.
§ 3 :19.
§ 3:20.
§ 3:21.
§ 3 :22.
§ 3:23.
3
Officers and Employees
Selection of Officers.
Duties of Officers.
Authority of Officers.
Officers as Employees.
Liability of Officers.
Removal of Officers.
Employees.
Discrimination in Employment-Title VII.
-Equal Pay Act.
Age Discrimination in Employment Act.
Vocational Rehabilitation Act.
-Vietnam Era Veterans' Readjustment Assistance Act.
Retirement Plans for Employees of Nonprofit Enterprises.
-Qualified Plans.
--Participation and Vesting Requirements.
--Funding of Qualified Plans.
-Limitations on Contributions.
-Integration with Social Security.
--Reporting Requirements for Qualified Plans.
--Plan Termination.
--Taxation of Benefits.
-Individual Retirement Accounts.
-Simplified Employee Pension .
TABLE OF CONTENTS
§ 3:24.
§ 3:25.
-Tax-Sheltered Annuities for Employees of §501(c)(3)
Organizations.
Checklist of Points to Remember.
CHAPTER 4
§ 4:0l.
§ 4:02.
§4:03.
§ 4:04.
§ 4:05.
§ 4:06.
§ 4:07.
§ 4:08.
§ 4:09.
§ 4:10.
§ 4:11 .
§ 4:12.
§ 4:13.
§ 4:14.
§ 4:15.
§ 4:16.
§ 4:17.
§ 4:18.
§ 4:19.
§ 4:20.
§ 4:2l.
§ 4:22.
§ 4:23.
§ 4:24.
§ 4:25.
§ 4:26.
Legal Problems of Nonprofit Enterprises
Legal Action Involving Nonprofit Enterprises.
Right of Association.
-Discriminatory Practices of Private Associations.
-Judicial Intervention in Religious Associations.
-Standing of Association To Seek Judicial Relief
Tort Liability of Nonprofit Enterprises.
-Charitable Immunity.
Application of the Copyright Act to Nonprofit Enterprises.
-Sources of Copyright Ownership.
- Copyright Protection .
-Public Performances of Copyrighted Music by Nonprofit
Enterprises.
-Fair Use of Copyrighted Works.
Securities Laws.
-Exemptions for Securities Issued by Nonprofit
Enterprises.
-Sale of Securities Donated to a Nonprofit Organization.
-Compliance with State Securities Laws.
Application of Antitrust Laws to Nonprofit Enterprises.
Unfair Competition.
Labor Laws.
-Selection of Labor Representative.
-Duty To Bargain in Good Faith.
-Subject Matter of Bargaining.
- Unfair Labor Practices.
-Strikes.
-Right To Work Laws.
Checklist of Points To Remember.
CHAPTER 5
§ 5:0l.
§ 5:02.
§ 5:03.
§ 5:04.
§ 5:05.
§ 5:06.
vii
Merger, Consolidation, and Dissolution
Procedure for Merger or Consolidation.
Effect of Merger or Consolidation.
Articles of Merger or Consolidation.
-Form of Articles of Merger.
-Form of Articles of Consolidation.
-Form of Articles of Merger or Consolidation of Domestic
and Foreign Corporation.
viii
Table of Contents
§ 5:07. Withdrawal of a Foreign Corporation.
§ 5:08. Sale of Assets.
§ 5:09. Voluntary Dissolution of a Nonprofit Corporation.
§ 5:10. Distribution of Assets.
§ 5:11. -Cy Pres Doctrine.
§ 5:12. -Articles of Dissolution.
§ 5:13. -Form for Articles of Dissolution.
§ 5:14. Involuntary Dissolution.
§ 5:15. Procedures After Dissolution.
§ 5:16. Bankruptcy.
§ 5:17. Checklist of Points To Remember.
Appendix-Model of Nonprofit Corporation Act