San Francisco, CA asked in Business Formation, Business Law and Public Benefits for California

Q: Can a CA Nonprofit Public Bene Corp use proxies to meet a quorum & to actions? & use unanimous consents in lieu of mtgs?

CA Corp Code 5510 + seem to allow proxies to achieve a quorum and to take actions "if allowed"

5516 allows for unanimous consent "if allowed"

Does this mean if the by-laws permit, both can be so used? Thx

2 Lawyer Answers
James L. Arrasmith
PREMIUM
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
Answered
  • Sacramento, CA
  • Licensed in California

A: Yes, a California nonprofit public benefit corporation can use proxies to meet a quorum and to take actions if it's allowed in the corporation's bylaws. Similarly, the use of unanimous consent is also allowed if it's permitted by the bylaws.

According to California Corporations Code Section 5510, "unless the articles or bylaws provide otherwise, a quorum is a majority of the voting power represented at the meeting in person or by proxy." This means that a nonprofit public benefit corporation can allow its members to use proxies to achieve a quorum.

Furthermore, according to California Corporations Code Section 5516, "any action required or permitted to be taken by the board may be taken without a meeting if all members of the board individually or collectively consent in writing to that action." This provision allows for the use of unanimous consent in lieu of meetings if it's allowed in the bylaws.

So, if the nonprofit public benefit corporation's bylaws allow for the use of proxies and unanimous consent, then these methods can be used to meet a quorum and to take actions.

A: The general rule for public benefit corporations is that "Any member may authorize another person or persons to act by proxy with respect to such membership." Corp Code Sec 5613(a). However, that section says that "this right may be limited or withdrawn by the articles or bylaws, subject to subdivision (e)." The limitation in subdivision (e) requires that "no amendment of the articles or bylaws repealing, restricting, creating or expanding proxy rights may be adopted without approval by the members."

Note, also, that Section 5613 lists a number of types of votes where "any proxy covering" those matters "is not valid as to such matters unless it sets forth the general nature of the matter to be voted on." So, as one example, if the members are going to vote on filling a vacancy on the board of directors (Corp Code Sec 5224), a proxy being used for that purpose has to say that it can be used for that purpose -- it can't just be a generic proxy. There are other types of votes listed in 5613.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.