Title 11B, Title 11B: Nonprofit Corporations

§ 8.05. Terms of directors generally (a) The articles of incorporation or bylaws must specify the terms of directors. Except for designated or appointed directors, the term of directors may not exceed six years. In the absence of any term specified in the articles of incorporatio…

§ 8.06. Staggered terms for directors The articles of incorporation or bylaws may provide for staggering the terms of directors by dividing the total number of directors into two, three, four, five, or six groups, with each group containing one-half, one-third, one-quarter, one-f…

§ 8.07. Resignation of directors (a) A director may resign at any time by delivering written notice to the board of directors, its chair, or to the president or other officer responsible for recording the minutes of the meetings of the directors of the corporation. (b) A resignat…

§ 8.08. Removal of directors elected by members or directors (a) The members may remove one or more directors elected by them without cause. (b) If a director is elected by a class, chapter, or other organizational unit, or by region or other geographic grouping, the director may…

§ 8.09. Removal of designated or appointed directors (a) A designated director may be removed by an amendment to the articles of incorporation or bylaws deleting or changing the designation. (b) Appointed directors: (1) Except as otherwise provided in the articles of incorporatio…

§ 8.10. Removal of directors by judicial proceeding (a)(1) The Superior Court may remove any director of the corporation from office in a proceeding commenced either by the corporation, its members holding at least 10 percent of the voting power of any class, or the Attorney Gene…

§ 8.11. Vacancy on board (a) Unless the articles of incorporation or bylaws provide otherwise, and except as provided in subsections (b) and (c) of this section, if a vacancy occurs on the board of directors, including a vacancy resulting from an increase in the number of directo…

§ 8.12. Compensation of directors Unless the articles of incorporation or bylaws provide otherwise, a board of directors may fix the compensation of directors. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)

§ 8.13. Financially disinterested majority—Public benefit corporations (a) No more than 49 percent of the individuals serving on the board of any public benefit corporation may be financially interested persons. (b) For the purposes of this section, “financially interested person…

§ 8.20. Regular and special meetings (a) If the time and place of a directors’ meeting is fixed by the bylaws or the board, the meeting is a regular meeting. All other meetings are special meetings. (b) A board of directors may hold regular or special meetings in or outside this …

§ 8.21. Action without meeting (a) Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by this title to be taken at a board of directors’ meeting may be taken without a meeting if the action is taken by all members of the board. Each act…

§ 8.22. Call and notice of meetings (a) Unless the articles of incorporation, bylaws, or subsection (c) of this section provide otherwise, regular meetings of the board may be held without notice of the date, time, place, or purpose of the meeting. (b) Unless the articles of inco…

§ 8.23. Waiver of notice (a) A director may waive any notice required by this title, the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided in subsection (b) of this section, the waiver must be in writing, signed by the…

§ 8.24. Quorum and voting (a) Unless the articles of incorporation or bylaws require a greater number, a quorum of a board of directors consists of: (1) a majority of the fixed number of directors if the corporation has a fixed board size; or (2) a majority of the number of direc…

§ 8.25. Committees of the board (a) Unless prohibited or limited by the articles of incorporation or bylaws, a board of directors may create one or more committees and appoint members of the board to serve on them. Each committee shall have two or more members, who serve at the p…

§ 8.30. General standards for directors (a) A director shall discharge his or her duties as a director, including the director’s duties as a member of a committee: (1) in good faith; (2) with the care an ordinarily prudent person in a like position would exercise under similar ci…

§ 8.31. Director conflict of interest (a) A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable or the basis for imposing liability on t…

§ 8.32. Loans to or guarantees for directors and officers (a) A corporation may not lend money to or guarantee the obligation of a director or officer of the corporation. (b) The fact that a loan or guarantee is made in violation of this section does not affect the borrower’s lia…

§ 8.33. Liability for unlawful distributions; statute of limitations (a) A director who votes for or assents to a distribution made in violation of this title is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed …

§ 8.40. Required officers (a) Unless otherwise provided in the articles or bylaws, a corporation shall have a president, a secretary, a treasurer, and such other officers as are appointed by the board. (b) The bylaws or the board shall delegate to one of the officers responsibili…

§ 8.41. Duties and authority of officers Each officer has the authority and shall perform the duties set forth in the bylaws. In addition, each officer, to the extent consistent with the bylaws, has the authority and shall perform the duties prescribed in a resolution of the boar…

§ 8.42. Standards of conduct for officers (a) An officer with discretionary authority shall discharge his or her duties under that authority: (1) in good faith; (2) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (3) i…

§ 8.43. Resignation and removal of officers (a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is effective unless the notice specifies a future effective date. If a resignation is made effective at a future d…

§ 8.44. Contract rights of officers (a) The appointment of an officer does not itself create contract rights. (b) An officer’s removal does not affect the officer’s contract rights, if any, with the corporation. An officer’s resignation does not affect the corporation’s contract …

§ 8.45. Officers’ authority to execute documents Any contract or other instrument in writing executed or entered into between a corporation and any other person is not invalidated as to the corporation by any lack of authority of the signing officers in the absence of actual know…

§ 8.50. Subchapter definitions As used in this subchapter: (1) “Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor’s existence ceased upon the consummation of the transaction. (2) “Director” …

§ 8.51. Authority to indemnify (a) Except as provided in subsection (d) of this section, a corporation may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if the individual: (1) conducte…

§ 8.52. Mandatory indemnification Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because he or she is or was a dire…

§ 8.53. Advance for expenses (a) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (1) the director furnishes the corporation a written affirmation of his or h…

§ 8.54. Court-ordered indemnification Unless limited by a corporation’s articles of incorporation, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On r…

§ 8.55. Determination and authorization of indemnification (a) Except as provided in section 8.53 of this title, a corporation may not indemnify a director under section 8.51 of this title prior to the final resolution of a proceeding, whether by judgment, order, settlement, conv…

§ 8.56. Indemnification of officers, employees, and agents Unless limited by a corporation’s articles of incorporation: (1) an officer of the corporation who is not a director is entitled to mandatory indemnification under section 8.52 of this title, and is entitled to apply for …

§ 8.57. Insurance A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of t…

§ 8.58. Application of subchapter (a) A provision treating a corporation’s indemnification of or advance for expenses to directors that is contained in its articles of incorporation, bylaws, a resolution of its members or board of directors, or in a contract or otherwise, is vali…