[NCUC-DISCUSS] [CCWG-ACCT] Memo on Fundamental Bylaws & Legal Liability of Members

[Seth Johnson]

Hi, I'm not getting this document in Arun's message, apparently now
forwarded to NCUC.  Could someone forward it?

I want to see whether I can see how or whether it argues that
"corporate activities" do include fundamental bylaws changes.

I'm not sure what I think about the matter in the area of corporate
bylaws, but it's certainly viable to distinguish the regular processes
of a government from its founding acts.  Amendment processes to
fundamental acts are regarded the same way.

Arun, and perhaps the article he sent, seems to be referring to
background California law as a basis for a view that everything
happens, including fundamental bylaws acts, through the Board -- which
strikes me as implausible.  I think that "corporate activities" means
the acts of the corporate entity created by the bylaws -- not
activities such as those establishing that entity.

And I would say the passage Jordan posted reads very clearly this way:

5150.  (a) Except as provided in subdivision (c), and Sections 5151,
5220, 5224, 5512, 5613, and 5616, bylaws may be adopted, amended or
repealed by the board unless the action would materially and
adversely affect the rights of members as to voting or transfer.
   (b) Bylaws may be adopted, amended or repealed by approval of
members (Section 5034); provided, however, that such adoption,
amendment or repeal also requires approval by the members of a class
if that action would materially and adversely affect the rights of
that class as to voting or transfer in a manner different than that
action affects another class.
   (c) The articles or bylaws may restrict or eliminate the power of
the board to adopt, amend or repeal any or all bylaws, subject to
subdivision (e) of Section 5151.

It says the board can do it, then it says the members can do it.  It
continues to say these acts by either path can restrict the power of
the board to do these acts.

All of this is consistent with setting up a foundation which serves to
limit the regular activities of the corporate entity, a basic function
of fundamental bylaws.


Seth



On Sat, Jun 20, 2015 at 4:20 PM, Jordan Carter <jordan at internetnz.net.nz> wrote:
> hi Arun
>
> Thanks for this thoughtful contribution.
>
> I was interested in the difference between this memo's conclusions regarding
> the power to approve fundamental bylaws, and those of the legal firms
> retained by the CCWG. Their view is clearly that in a member structure,
> members can have approval rights for bylaws changes. The memo you have
> circulated seems on first glance to conclude that they cannot.
>
> Am I reading this right or is it just a matter of the way it is expressed?
>
> best
> Jordan
>
> On 20 June 2015 at 16:32, Arun Sukumar <arun.sukumar at nludelhi.ac.in> wrote:
>>
>> Hello all,
>>
>> Please find attached a memo/primer from the National Law University, New
>> Delhi explaining the idea of Fundamental Bylaws and examining its basis in
>> California law. The document also has some research on what's known in some
>> jurisdictions as courts "lifting the corporate veil", an action that
>> potentially exposes members to legal liability.
>>
>> Hope this is useful to those who are following the CCWG's work. This is
>> simply to supplement the legal advice CCWG is getting from both law firms.
>>
>> Best,
>> Arun
>>
>> --
>> -
>> @arunmsukumar
>> Senior Fellow, Centre for Communication Governance
>> National Law University, New Delhi
>> Ph: +91-9871943272
>>
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>> Accountability-Cross-Community at icann.org
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>>
>
>
>
> --
> Jordan Carter
>
> Chief Executive
> InternetNZ
>
> 04 495 2118 (office) | +64 21 442 649 (mob)
> jordan at internetnz.net.nz
> Skype: jordancarter
>
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