Recent Developments in Ohio Regarding Church Business Meetings

An Ohio court ruled that the members of a nonprofit corporation could not vote by proxy at a special business meeting since proxy voting was not authorized in the corporation’s articles of incorporation or bylaws.

Church Law and Tax1998-07-01

Church business meetings

Key point. The general nonprofit corporation laws of many states prohibit proxy voting unless specifically authorized by a nonprofit corporation’s charter or bylaws.

An Ohio court ruled that the members of a nonprofit corporation could not vote by proxy at a special business meeting since proxy voting was not authorized in the corporation’s articles of incorporation or bylaws. A nonprofit hospital corporation sent a notice to all members informing them that a special business meeting had been called to amend the definition of “members” in the articles of incorporation. The notice included a form allowing a member to vote by proxy. The overwhelming majority of members voted in favor of the amendment by proxy voting. Members opposed to the change challenged the legality of the vote in court. A state appeals court ruled that the proxy votes were invalid. It noted that Ohio’s Nonprofit Corporation Law specifies that “unless the articles of incorporation or the regulations otherwise provide, no member who is a natural person shall vote or act by proxy.” While the corporation’s bylaws allowed amendments by proxy voting, the articles of incorporation did not. Since the proposed amendment involved the definition of “members” in the articles of incorporation, proxy voting was not authorized and was invalid.

Application. There are two points to note about this case. First, proxy voting is not allowed under the nonprofit corporation laws of many states-unless specifically authorized by a corporation’s articles of incorporation or bylaws. Is your church incorporated? If so, you should review your state nonprofit corporation law to determine if proxy voting is allowed, and if so under what conditions. It may be that proxy voting is only allowed if specifically authorized by your articles of incorporation or bylaws. If this is the case, what do your governing documents have to say about this issue? It would be well to resolve these issues before someone insists on voting by proxy at a future business meeting. Second, if your articles of incorporation or bylaws authorize proxy voting, are there any conditions? In this case, only the bylaws authorized amendments by proxy voting. As a result, the court refused to allow an amendment to the articles of incorporation by proxy voting. Hecker v. White, 688 N.E.2d 289 (Ohio App. 1996).
[Corporations, Church Business Meetings]

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