What proceeds should I follow to bring on new Board Members?

Asked over 1 year ago - Brooklyn, NY

Hello all,

We are a small not-for-profit in NYC, and lately, we have been trying to build a stronger board. Two of our current board members resigned, and we have found potential candiates to replace them. What are the procedures that must be followed in exiting these current members and bringing on the new ones? We have a conflict of interest policy in place, which we are asking them to sign, but along with that, any other paperwork we should do? Do we need to report this change to the state or the IRS? Any advice would be very much appreciated. Thank you!

Attorney answers (4)

  1. Jeffrey Mead Kurzon

    Contributor Level 9

    2

    Lawyers agree

    Answered . You should follow the corporation's by-laws. The resigning board members should ideally do so in writing. Then you should have resolutions appointing (or electing) the new board members. Your conflict of interest policy should also be adopted by resolutions, if not done already. You do not need to report the change to the state or the IRS, but double check with the Attorney General's office about your filing requirements as they have oversight over not-for-profits (most usually with respect to your fundraising activities).

    Please note that this answer is not intended to serve as legal advice for any purpose. All legal advice rendered... more
  2. Maureen Crush

    Contributor Level 6

    2

    Lawyers agree

    Answered . We agree with Attorney Kurzon that the starting place is your by-laws which set out procedures for appointing new board members. You may find that your by-laws require the organization to have a specific number of directors or a range is set out (5-9 directors). Many not-for-profit organizations require a potential board member to complete an application listing qualifications for service and prior or concurrent boards on which the applicant has served. Obviously, these two directors have already accepted the offer to serve, but it would be good to establish the application as a practice in the future. As noted, written resignations from the two departing directors are preferred, but at a minimum, the fact that they have resigned should be referenced in minutes of the entity at the next board meeting. Depending on the size (financial) of your agency, the directors (and potentially the change of directors) may be required to be disclosed on the Form 990 that is filed by the organization.

  3. Jonathan B. Lefkowitz

    Contributor Level 13

    Answered . Everyone's answer is correct: follow your bylaws, record decisions in your minutes. If you only operate in NY, your 990 and NY CHAR 500 (the NY annual filing) will list your board otherwise no other action is needed with the State or Feds.

  4. Michael Charles Doland

    Contributor Level 20

    1

    Lawyer agrees

    Answered . My two colleagues have given you very good advice: 1) Bylaws 2) Minutes 3) filings with the state to indicate current directors. Try to find a lawyer to sit on your Board who has a passion for your charitable purpose to benefit from ongong matters such as the above.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more

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