I am trying to set up a Nonprofit organization to bring development to third world counties, Especially in Myanmar and India. Below I walk through:  (i) what is a sole member structure; (ii) how sole member nonprofits are useful; (iii) when implementing a sole member structure, what are some challenges; and (iv) suggestions to help implement a sole member structure. A voting member corporation can also have a sole member or a sole corporate member which can result in the tightest control one can exercise over a nonprofit corporation. We have frequently referred to a “sole member” corporation to protect a founder of a nonprofit corporation when the founder wants assurance that he or she can develop the organization as a … For this reason, many nonprofit subsidiaries are created with the parent corporation as the sole corporate member … A lot. Many states’ laws still allow one person, or one corporation, to be the “sole member” of a nonprofit, retaining the right to elect and remove directors. The term "member" is somewhat misleading when applied to nonprofit organizations, as it brings connotations of ownership. Enter a large financially-healthy nonprofit, able to take over back office and administrative functions for the smaller nonprofit. In my experience, the integrity of the governing body will take over and quickly remove the bad seed that can … [Photo: Flickr user Smudge 9000 ] By Christina Farr 4 minute Read You can buy the 9 page PDF in our store for only $5.95. So you can be the sole shareholder, director and officer for your company. Have not changed or amended the bylaws … Lawyer's Assistant: Has anything been officially filed? This is a decision you will have to make at your first meeting when you adopt your Bylaws. I notice that we are supposed to have members, but under the bylaws it is not clear what their role is. Here's what our readers say about Nonprofit Issues The larger nonprofit’s board may also want to protect the larger nonprofit from liability by maintaining the separate legal entity. In GA State, can a Sole Member Bylaws Protect Founder of Nonprofit? --Stephanie H. Thank you for your informative and keen advice on nonprofit matters. A single-member L… New Subscribers can have full access to the entire website and all editions for 3 months for only $17.95. However, no board member shall serve more than two three-year terms. Not everyone believes that they are appropriate or in the public interest.  But we have seen too many founders, who work for years essentially as volunteers, to create an organization and then get fired when their “best friends” on the Board decide to go in a different direction.  This Ready Reference Page contains a complete form of bylaws to provide protection to the founder.Â. 1:30 to 3:00 PM ET, The year 2020 has been a year like no other for nonprofits.  With a combination of COVID-19, an economic recession, and a shift in emphasis on racial justice, many nonprofits have struggled.  Many have had to consider changes in their basic structure — mergers, acquisitions, new strategic alliances, hibernation, and, in many cases, dissolution. It can also specify when, where, and how your board of directors can … Have a question for us? Submit yours here. They can protect the organization from potential problems by clearly outlining rules around authority levels, rights, and expectations. Sole member structures can also mitigate legal exposure to their parent nonprofits. When staff members see a new organization come in as sole member, it can create anxiety about how operations will change. By insulating directors slightly from the sole member, directors will have the space to speak critically when they feel the organization is being led down the wrong path. (PA CLE & CPE credit is available for this webinar). All corporations need to hold an annual shareholder meeting and a board of directors meeting. Nonprofit corporations offer the same limited liability and asset protection features of a normal corporation. You can have more if needed, but one per year is the minimum. You can state, "Founder or their named successor shall remain the sole member of the organization and shall have the right to veto any decisions made without his or her approval." Our organization is now reviewing its bylaws for the first time in fifteen years. A sole member structure is really appealing when an individual or corporation creates a new nonprofit and wants to retain long term control over the nonprofit’s mission and activities. In some scenarios, leaving in largely separate systems might make sense, whereas in others the new sole member might displace a number of the controlled nonprofit’s overhead functions. A good modern analogue is a labor union – the membership is active in electing the leadership, so even though the Board is still responsible for overseeing the union’s activities, the members can keep the Board in check. Not a subscriber and want to access this page? Commentary: Keep Charities Out of Politics, Parent-child centers qualify for tax exemption, Club Can’t Compel Arbitration Based on Notice on Back of Renewal Form, Board has inherent power to suspend club members, NY AG Able to Require Donor List For Charitable Solicitation Registration, Director Retains Standing to Sue Even After Removal from Board, Attorney General Can’t Cy Pres Assets Of One Volunteer Fire Company to Another. Both organizations recognize that the smaller nonprofit has developed goodwill, so they don’t want to just absorb the smaller nonprofit’s programs into the larger nonprofit – there’s a benefit to keeping the smaller organization as a separate legal entity, with its “brand” and support intact. A voting member corporation can also have a sole member or a sole corporate member which can result in the tightest control one can exercise over a nonprofit corporation. Corporation shall be USA Rugby ( the “ members ” were responsible for making decisions board s! 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