Holding Nonstock Corporation Member Meetings by Remote Means
On May 13, 2020, Governor Ned Lamont entered Executive Order 7NN related to various matters, including the manner in which nonstock corporations may hold regular or annual meetings of their members. A nonstock corporation is one that does not issue capital stock or shares and is nonprofit, meaning that it cannot make distributions to its members, directors, or officers.
Executive Order 7NN adds a new subsection (e) to Connecticut General Statutes § 33-1061, which previously required nonstock corporations to hold member meetings “at the place stated in or fixed in accordance with the bylaws” or at the corporation’s principal office if no such place was stated or fixed. For the duration of the public health and civil preparedness emergency, however, new subsection (e) permits a nonstock corporation’s board of directors to determine whether to hold member meetings remotely rather than at a physical location and to adopt guidelines and procedures for conducting the meetings through remote technology. Members participating by remote means shall be deemed present at the meeting and may vote if the corporation has implemented reasonable measures to verify that the participants are members, to enable them to view and hear the proceedings as they are occurring, and to communicate at the meeting.
The Executive Order leaves intact subsection (d) of Connecticut General Statutes § 33-1061, which states, “The failure to hold an annual or regular meeting at the time stated in or fixed in accordance with a corporation's bylaws does not affect the validity of any corporate action.” Thus, if a nonstock corporation’s board of directors decides that it may be too difficult to conduct a member meeting remotely or if it prefers in-person meetings, it may consider postponing a member meeting until it can hold an in-person meeting, provided that its bylaws do not prohibit postponement of the meeting.
For further information on the implications of COVID-19 on nonprofit corporations, please contact John F. Wolter at email@example.com or at (860) 548-2645 or Richard S. Order at firstname.lastname@example.org or at (860) 548-2659.
Disclaimer: The information continued in this material is not intended to be considered legal advice and should not be acted upon as such. Because of the generality of this material, the information provided may not be applicable in all situations and should not be acted upon without legal advice based on the specific factual circumstances.