Charter over Bylaws

[Guest Tinamarie]

In a small-ish professional society of around 200 members, we have a Certificate of Incorporation (Charter), Bylaws and Standing Rules. The Charter says that, "Bylaws governing the classes of admission of members, the amount of initiation fee and periodic dues, the rules and regulations to be observed, the qualifications for voting, the resignation or expulsion of members, the election, powers, and duties of officers and a general governing body, and all other matters and things usually contained in corporate bylaws may from time to time be adopted, amended, or repealed by the affirmative vote of two-thirds of all members entitled to vote under the bylaws then existing."

Several questions...

Are these the only things the bylaws can contain?

If mentioned above in the Charter, do all of these thing have to be in the Charter or do the words "may be adopted..." mean that any of these things could be in there?

Does "... the affirmative vote of 2/3 of all members entitled to vote..." mean 2/3 of all eligible members who vote at the annual meeting (assuming a quorum is present) or does it mean 2/3 of the entire membership?

 

[Guest Tinamarie]

The second question was to read, "If mentioned above in the Charter, do all of these things have to be in the Bylaws or do the words...."

[Guest Zev]

The interpretation of these items is something your organization will have to grapple with. The safest thing is for you to ask the organization that issued the charter to clarify these matters. In this fashion you may avoid a disagreement with the organization and perhaps a rebuke on their part. Also, the part that says "...two-thirds of all members entitled to vote under the bylaws then existing" may eventually render highly unlikely for your organization to amend its own bylaws if its membership increases and the attendance remains low enough to prevent a two-thirds vote from ever being achieved. Perhaps you should request the charter-issuing organization to change their restriction by eliminating the entire expression "of all members entitled to vote under the bylaws then existing." Please stand by for other opinions.

[Tinamarie]

This Charter was written in 1947 and has not been amended except to update the name of the organization in 1961.

I note that in the documentation for the 1961 amendment to change the name or the association that was filed with the Office of the Secretary of State, the wording says, "At a regularly convened meeting of the directors and members of the corporation held on the 5th day of June, A.D. 1960 the following amendment to the Articles of Incorporation was adopted: To change the name to XXXXXX. The above change of name received an affirmative vote by majority of quorum of the membership on the above stated date and was affirmed and approved by a majority of the Board of Directors, convened in a regular meeting on date. .... The corporation has members with voting rights. a quorum was present at the meeting held n the above date; and the said amendment received at least two-third of the votes entitled to be cast by members present or represented by proxy at such meeting."

Does this interpret to mean that the statement in the amendment filed and approved by the Office of the Secretary of State "amendment received at least two-third of the votes entitled to be cast by members present or represented by proxy at such meeting."..." is the same as the statement is the Charter..."by the affirmative vote of 2/3 of all members entitled to vote under the bylaws then exisiting." ?

So, could we clean up the language in the Charter with a 2/3 vote of the members present and voting at our next annual meeting?

 

 

[Josh Martin]

48 minutes ago, Tinamarie said:

This Charter was written in 1947 and has not been amended except to update the name of the organization in 1961.

I note that in the documentation for the 1961 amendment to change the name or the association that was filed with the Office of the Secretary of State, the wording says, "At a regularly convened meeting of the directors and members of the corporation held on the 5th day of June, A.D. 1960 the following amendment to the Articles of Incorporation was adopted: To change the name to XXXXXX. The above change of name received an affirmative vote by majority of quorum of the membership on the above stated date and was affirmed and approved by a majority of the Board of Directors, convened in a regular meeting on date. .... The corporation has members with voting rights. a quorum was present at the meeting held n the above date; and the said amendment received at least two-third of the votes entitled to be cast by members present or represented by proxy at such meeting."

Does this interpret to mean that the statement in the amendment filed and approved by the Office of the Secretary of State "amendment received at least two-third of the votes entitled to be cast by members present or represented by proxy at such meeting."..." is the same as the statement is the Charter..."by the affirmative vote of 2/3 of all members entitled to vote under the bylaws then exisiting." ?

So, could we clean up the language in the Charter with a 2/3 vote of the members present and voting at our next annual meeting?

Do the charter and the articles of incorporation, in this instance, refer to the same document or to different documents? It seems somewhat unclear from the latest post.

Edited January 2, 2019 at 11:25 PM by Josh Martin

[Gary Novosielski]

1 hour ago, Guest Tinamarie said:

Are these the only things the bylaws can contain?

Well, perhaps, but that's not a very harsh restriction when you consider that among the items on the list is:

1 hour ago, Guest Tinamarie said:

... all other matters and things usually contained in corporate bylaws.

And that leaves you a fairly copious amount of wiggle room.

[Tinamarie]

23 minutes ago, Josh Martin said:

Do the charter and the articles of incorporation, in this instance, refer to the same document or to different documents? It seems somewhat unclear from the latest post.

The Certificate of Incorporation and the Charter are the same document.

[Tinamarie]

2 minutes ago, Tinamarie said:

 

 

2 minutes ago, Tinamarie said:

The Certificate of Incorporation and the Charter are the same document.

The language in the Charter is, "by the affirmative vote of 2/3 of all members entitled to vote under the bylaws then existing."

The language in the Secretary of State's approval of the amendment for the name change was,  "amendment received at least two-third of the votes entitled to be cast by members present or represented by proxy at such meeting." The SOS accepted this as the vote required to change the Charter.

Do these 2 statements imply equivalent things? The SOS accepted "2/3 of votes entitled to be cast by members present..." to make a change to the Charter. If the SOS made this interpretation to amend the Charter, can the association make the same interpretation to amend the Bylaws, as referenced in the Charter in the language, "two-thirds of all members entitled to vote under the bylaws then existing"  to mean the same thing, ie: 2/3 of the votes entitled to be cast at the annual meeting?

In the case of ambiguity in the Charter, can we use the same recommendations for ambiguity in the bylaws (pp 588-589)?  "The interpretation should be in accordance with the intention of the society at the time the bylaw was adopted, as far as this can be determined. Again, intent plays no roles unless the meaning is unclear or uncertain, but where ambiguity exists, a majority vote is all that is required to decide the question. The ambiguous or doubtful expression should be amended as soon as practicable."

 

[Joshua Katz]

Ultimately, only your organization can interpret this (subject to applicable laws since it is a corporation), but my personal opinion is that the amendment language pretty clearly requires 2/3 of all members, not all members present. But, given that the charter is a legal document, there may be applicable case law in your state interpreting it, and so it's best to consult with an attorney on this. Any applicable procedural law will take precedence over all else. 

On the SoS language, those offices often have standard forms, so I wouldn't read too much into what the approval letter says. Ultimately, you need to follow your rules, and your organization (not the SoS) interprets them - although the SoS interpretation should be persuasive. 

Ideally, you should amend the charter to remove this provision, since RONR suggests that Articles contain the minimum required by law - you could put the requirements to amend the bylaws into the bylaws. 

As to your last question, yes, interpretation should follow the principles of interpretation, and so far as they are known, the intentions of the voting body (i.e. how the voting body understood the wording) should be followed. But do you know the intent of the voting body in 1947? Also, it first remains to determine if the wording is, in fact, ambiguous. It doesn't look ambiguous to me, but I expect others will disagree.

[Tinamarie]

Thanks for the responses. i see a clear way forward in sorting this out.