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

[Burr, Becky]

Is it possible that you are looking at the wrong code provisions Arun. The provisions relating to membership corporations create specific exceptions to the general rule

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On Jun 20, 2015, at 5:41 PM, Arun Sukumar <arun.sukumar at nludelhi.ac.in<mailto:arun.sukumar at nludelhi.ac.in>> wrote:

Hi Jordan, the California Corporate Code seems pretty clear on this: all "corporate activities", which presumably include changes in bylaws, shall be exercised under the "ultimate authority of the board".

I'm frankly a little confused by the legal counsel that says changes to bylaws can be made without board approval. Where's this being drawn from? A statutory provision? If so, I'vent seen it. I suppose what the law firms could be referring to is the board passing a resolution saying, "here, we authorise you to change bylaws without approval". But that can easily be changed through another board resolution.

On Sat, Jun 20, 2015 at 5:20 PM, Jordan Carter <jordan at internetnz.net.nz<mailto: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<mailto: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

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