Non-Profit Corporations Act  Continued From Page 19


the corporation may charge a reasonable fee not to exceed the cost of reproduction.


A corporation must provide, on request, its most recent financial statements to a member, such as a balance sheet as of the end of the fiscal year and a statement of operations for the year.


Board of Directors A director must conduct himself (1) in good faith, (2) with


the care an ordinarily prudent person in a like position would exercise under similar circumstances, and (3) in a manner the director reasonably believes to be in the best interest of the corporation. Directors may rely on employees, volunteers, legal counsel, accountants, committees, or other experts in discharging their duties. And the Act specifically states that directors are not trustees with respect to the corporation or any property held by the corporation.


Directors may rely on employees, volunteers, legal counsel, accountants, committees, or other experts in discharging their duties.


Directors are generally not liable to the corporation for any action taken or failure to act with a few exceptions: (1) the value of any benefit in cash or other property or services to which the directors is not entitled; or (2) intentional misconduct or a knowing violation of law. Directors are not liable to members for any action taken or failure to act except: (1) a knowing infliction of harm on the member; or (2) the intentional violation of criminal law or the Act.


Term Limits Terms of directors cannot exceed five years. If a


vacancy occurs on the board, then the remaining directors may appoint someone to fill the vacancy until the end of the term. Even if a director’s term expires, if there is no director elected to replace him, then their term continues until a new director is elected or appointed.


20 Community Associations Journal | November–December 2021


Committees Committees of the board must have at least two


directors serving – such as an Architectural Control Committee (ACC). In general, if committee members are not directors, they are not entitled to vote unless it is impractical or impossible to comply with applicable law. Thus, ACCs would be allowed to act as it is provided for in the governing law. A committee of the board may act as the board in certain situations, but the statute enumerates several instances that are reserved solely to the board.


The board may create “advisory” committees whose members do not need to be directors. These committees have advisory powers only.


The board may create “advisory” committees whose members do not need to be directors. These committees have advisory powers only. They are not considered a “committee of the board” and may not exercise any board powers.


Conclusion This article only highlights a few of the Act’s provisions.


Although the Act is long, it is required reading. Community association advisors, directors, and members need to understand how its provisions will affect the community in which they live.


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