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Officer not seeking re-election - when does their term end?

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When an officer of a non-profit group decides not to seek re-election, when does their term officially end? The board assumed it would be at the end of the AGM, as well as the expectation the individual would provide the AGM minutes - since they did not ask anyone else to take them.

 

The AGM minutes are needed at the bank to change signing authority to the new officers - this is what the bank has told the non-profit group. The former officers in question attended the AGM, and functioned in their roles during the meeting, so it was expected that they would supply the minutes for the AGM, and then go sign-off at the bank. After a few weeks when this transfer and outstanding items had not been done, the board inquired the former officers on when this might be happening, also explaining it was getting urgent that they do so. The board was told that the minutes and other outstanding items would be coming.

 

Then more time passes. The bank informs the new board that their account is now frozen due to that the former officers who were on file have not come in and removed their signing authority. The bank says that they cannot move forward without the sign-off of the two officers, or not having a copy of the AGM minutes showing the new board.

 

What recourse does a non-profit group have when former officers, who in a fiduciary capacity, intentionally do not sign-off at the bank nor provide essential documents as they had agreed to? Essentially, the former officers are holding the association hostage.

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When an officer of a non-profit group decides not to seek re-election, when does their term officially end? The board assumed it would be at the end of the AGM, as well as the expectation the individual would provide the AGM minutes - since they did not ask anyone else to take them.

The terms of the outgoing officers ends when the bylaws say they end, usually at the close of the annual meeting or at some other precisely defined time.  If they don't specify when the outgoing members terms end, they almost certainly specify when the new terms begin.... which, by definition.... will mark the end of the outgoing members' terms.

 

Edited to add:  Normally, the outgoing secretary will be the one to take and prepare the minutes, but the minutes can actually be prepared by any member and approved by the board or whatever committee is authorized to approve the minutes.   In addition, it seems the board could adopt a resolution directing the bank to change the signatories on the bank  account and the new president and/or  secretary would sign it and attest to its authenticity on behalf of the organization.

Edited by Richard Brown

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   In addition, it seems the board could adopt a resolution directing the bank to change the signatories on the bank  account and the new president and/or  secretary would sign it and attest to its authenticity on behalf of the organization.

 

I would be very hesitant to offer a suggestion here purporting to tell a bank what procedure to use to change account signatories for an organization.

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I would be very hesitant to offer a suggestion here purporting to tell a bank what procedure to use to change account signatories for an organization.

Well, it's more like a request than a demand and is, in my experience, essentially the way such resolutions are worded.  If you prefer that rather than saying "Stickittoem Bank"  is  directed to remove John Doe and Mary Smith as signatories and substitute Frank Doe and Jane Smith in their places", that the resolution say, instead, "Resolved that Frank Doe and Jane Smith be substituted as signatories on our club bank account with "Stickittoem Bank", fine.  I don't have a problem with that.  Both resolutions accomplish the same purpose.

 

The point I was trying to make is that the change of signatories can possibly be made by means of a corporate resolution rather than through production of minutes.  Again, in my experience, it is usually done by resolution attested to by the president and/or the secretary.

 

So, I'm not hesitant at all to do it that way.  It is the most common way, in my experience.  I have found that banks don't really care that much about minutes:  they want a corporate resolution.

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In my experience, the society would adopt a resolution stating which named individuals were to have authority to sign checks, when this authority would go into effect, and optionally when it would expire, and present a certified copy of the resolution to the bank.

 

The bank will often require the signing of some document of their own design confirming that the resolution was duly adopted at a regular or properly called meeting of the society at which a quorum was present.

 

Permission of the outgoing or officers, has not been an issue.

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An update - weeks have passed since the AGM - the former treasurer and former acting president still have not signed-off at the bank, despite conversations with the new president that they would be doing so. The bank says they cannot add new signing authority until the former officers come-in and sign-off. Basically, this non-profit group is being held hostage. The former officers are not returning calls, texts, or emails. Any suggestion on next steps?

 

 

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Thanks for your helpful tip JDStackpole, not sure if this a legal issue yet - wanted to go through Roberts Rules processes first, if there are any for this sort of thing. Ultimately, speaking to a lawyer might be the answer - but right now - what laws are they actually breaking? Is this defined in Roberts Rules of legal obligations that officers have to a non-profit group?

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An update - weeks have passed since the AGM - the former treasurer and former acting president still have not signed-off at the bank, despite conversations with the new president that they would be doing so. The bank says they cannot add new signing authority until the former officers come-in and sign-off. Basically, this non-profit group is being held hostage. The former officers are not returning calls, texts, or emails. Any suggestion on next steps?

Have the society or its board adopt a resolution at a meeting directing that the authority of the former officers to sign checks is revoked and that the new officers  are the new signatories on the checking account.  Talk to someone with some authority at the bank... go as far up the chain as you need to.... to find out what form they prefer it to be in.  As Gary Novosielski said in a comment above, the bank quite likely has a form of its own.   Corporate resolutions (and resolutions from unincorporated associations) regarding changing the names of the people with the power to sign checks on behalf of the organization is quite common.

 

You can also pick up the phone and call the obstinate former  officers and say, "Hey, we HAVE to take care of this.  When can I pick you up so we can go to the bank and change the signature cards for the account?  How about tomorrow at lunch?"  In my experience, it should not be necessary to have their signatures, but some banks LIKE to have it because it is "cleaner" and easier for them and is perhaps less risky than if they rely on a corporate resolution alone. 

 

If that doesn't work, then you may have no choice but to get an attorney involved.  RONR deals with meeting procedures, not administrative procedures outside of a meeting.

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Thanks Richard, yes, many attempts have been made - phone calls, texts, and emails have been sent. The new president spoke on the phone a couple of times to the  acting past president - all along the past president said it would be taken care of. The bank rep has called them several times to no avail. Will check at the bank about their forms - thus far, the bank rep has said that they MUST come in. The former officers both work in the same town as the bank - so there is no acceptable reason for their difficult behaviour, other than they are being spiteful. Transferring banking authority is now urgent as new checks need to be ordered, since the former treasurer had pre-signed most of them - which is a definite no-no. Unfortunately, nothing in the bylaws prevented common-law couples from taking on officer roles, or how to deal with such people if one or both get disgruntled or vengeful.

Appreciate all of your help! Thanks again.

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RONR does not address the procedures for transfer of bank account signatories, since this will vary among different organizations and different banking institutions. It does say that any records such as minutes or financial reports are the property of the organization and whatever records are kept by officers should be turned over to the organization at the end of their terms of office.

 

The procedure necessary to transfer the signatory powers for your organization's bank accounts from previous officers to the current officers is determined solely by your bank, so before your start preparing resolutions about this, you need to find out exactly what your bank requires and then do whatever you can to satisfy those requirements.

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