Although this change is minor in relation to some of the other changes ushered in by the amendments, it does have the potential to create issues surrounding the corporate governance of your nonprofit organization. If participation in member, shareholder, or board of director meetings is unaddressed in the nonprofit’s articles of incorporation or by-laws, this provision could impact how shareholder, members, and board members can conduct their business on behalf of the entity. This is true even if the articles or by-laws expressly require ‘presence in person’ at the meetings because both MCL 450.2521 and MCL 450.2405 state that remote participation by shareholders, members, or board members constitutes ‘presence in person’ at the meeting. Thus, even if the corporate by-laws or articles of incorporation state that shareholders, members, or board members must participate in person or must be physically present to vote, the articles or by-laws may still be insufficient to stop the operation of these statutes. The articles or by-laws need to expressly prohibit remote participation by shareholders, members, and directors at meetings in order to be effective against the recent amendments to the Nonprofit Corporation Act.

This change to the Nonprofit Corporation Act can also impact nonprofit corporations who are subject to the requirements of the Open Meetings Act, including local school boards and public school academies. This is because remote presence by teleconference is permissible under the Open Meetings Act. Goode v Dept of Soc Serv’s, 143 Mich App 756, 759-760 (1985), lv den 424 Mich 882 (1986). In order to comply with the Open Meetings Act, however, “the meeting must satisfy the openness and notice requirements in that act . . . [and] . . . the central site must be set up so that interaction among all the representatives of the constituent districts, whether they be on or off that site, and interested members of the public is possible.” 1995 OAG 6835. Thus, if a nonprofit that is subject to the Open Meetings Act wishes to allow remote presence at meetings, its corporate governance documents need to be amended so the Open Meetings Act is not violated by remote participation at meetings.

Because these changes could impact the operation of your nonprofit entity or your school board, your corporate governance documents, including the by-laws and articles of incorporation, should be reviewed to ensure that remote presence at board meetings is acceptable is properly addressed. If your nonprofit wishes to allow remote attendance at meetings, its corporate by-laws and articles should still be reviewed and amended to address when this type of attendance is permissible and what will happen if the technology fails in some manner. In addition, if your nonprofit is subject to the Open Meetings Act, the corporate governance documents need to be amended so that remote participation comports with the requirements of the Open Meetings Act. Any language you wish to have added to the corporate by-laws or articles should be drafted by an attorney to ensure meetings are properly conducted.

If you need any assistance in reviewing, drafting, or amending a provision of the corporate by-laws or articles of incorporation, Shifman & Carlson, P.C. would be happy to assist you.

Mr. Murphy began here as an associate earlier this year after working as a Judicial Law Clerk to Justice Stephen J. Markman of the Michigan Supreme Court. Before that, he attended the University of Detroit Mercy School of Law, where he received his Juris Doctor, summa cum laude, and Western Michigan University, where he received his Bachelor of Business Administration in Economics.

Bringing Unique Talents to the Table

Attorney Sean P. Murphy will fit right in with our law group, as he is also dedicated to serving the best interests of his clients. Mr. Murphy believes that hard work, dedication, and passion for the law is the best way to get results, in and out of court, and this philosophy fits squarely with our mission here at Shifman & Carlson, P.C.

Not only does Mr. Murphy fit in well with our team, but he also brings a broad array of experience and professional memberships to our firm. In addition to his work on the Michigan Supreme Court, Mr. Murphy has also had the opportunity to work at the United States Department of Justice: Office of the US Trustee and the Wayne County Third Judicial Circuit Court. He is also a member of the State Bar of Michigan, the Shamrock Bar Association, and the Incorporated Society of Irish American Lawyers. With this experience and dedication, Mr. Murphy is responsible for handling cases in the following areas:

• Business litigation
• Franchise law
• Probate administration
• Estate planning
• Real Estate law
• Municipal law

If you would like to know more about our new attorney or learn how we can help you with your sensitive legal matter, call us at 248.972.8891 today.