Corporate Law nfp organization in nys

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evaann

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Our new board Pres is being ousted under sect 714 of the NYS nfp laws. I think that it does not apply because it speaks to "officers" such as the Pres. or VP of a company that are paid employees of the organization, she is a volunteer board member whom is now a member of the executive committee on said board.
Any help??
 
Originally posted by evaann
Our new board Pres is being ousted under sect 714 of the NYS nfp laws. I think that it does not apply because it speaks to "officers" such as the Pres. or VP of a company that are paid employees of the organization, she is a volunteer board member whom is now a member of the executive committee on said board.
Any help??
Let's take a look.... although I don't think being paid has anything to do with the issue of conflict of interest. What is the reason she is being ousted? Does it matter that she is a voluntary officer or whether she was paid $1 or $50,000? Many of the issues remain the same with regard to an officer to business with the entity to which he/she owes a fiduciary duty. I've reproduced that section below and I don't thik the salary issue makes a difference, unless there is something I am missing here or you are confusing subsection (f) as requiring a salary.
 
S 715. Interested directors and officers.
(a) No contract or other transaction between a corporation and one or
more of its directors or officers, or between a corporation and any
other corporation, firm, association or other entity in which one or
more of its directors or officers are directors or officers, or have a
substantial financial interest, shall be either void or voidable for
this reason alone or by reason alone that such director or directors or
officer or officers are present at the meeting of the board, or of a
committee thereof, which authorizes such contract or transaction, or
that his or their votes are counted for such purpose:
(1) If the material facts as to such director`s or officer`s interest
in such contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or known
to the board or committee, and the board or committee authorizes such
contract or transaction by a vote sufficient for such purpose without
counting the vote or votes of such interested director or officer; or
(2) If the material facts as to such director`s or officer`s interest
in such contract or transaction and as to any such common directorship,
officership or financial interest are disclosed in good faith or known
to the members entitled to vote thereon, if any, and such contract or
transaction is authorized by vote of such members.
(b) If such good faith disclosure of the material facts as to the
director`s or officer`s interest in the contract or transaction and as
to any such common directorship, officership or financial interest, is
made to the directors or members, or known to the board or committee or
members authorizing such contract or transaction, as provided in
paragraph (a), the contract or transaction may not be avoided by the
corporation for the reasons set forth in paragraph (a). If there was no
such disclosure or knowledge, or if the vote of such interested director
or officer was necessary for the authorization of such contract or
transaction at a meeting of the board or committee at which it was
authorized, the corporation may avoid the contract or transaction unless
the party or parties thereto shall establish affirmatively that the
contract or transaction was fair and reasonable as to the corporation at
the time it was authorized by the board, a committee or the members.
(c) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board or of a committee which
authorizes such contract or transaction.
(d) The certificate of incorporation may contain additional
restrictions on contracts or transactions between a corporation and its
directors or officers or other persons and may provide that contracts or
transactions in violation of such restrictions shall be void or
voidable.
(e) Unless otherwise provided in the certificate of incorporation or
the by-laws, the board shall have authority to fix the compensation of
directors for services in any capacity.
(f) The fixing of salaries of officers, if not done in or pursuant to
the by-laws, shall require the affirmative vote of a majority of the
entire board unless a higher proportion is set by the certificate of
incorporation or by-laws.
 
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