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Colorado Revised Nonprofit Corporation Act Frequently Asked Questions

What provisions are required to be included in the articles of incorporation?

The articles of incorporation must include the following:

  • The domestic entity name;
  • The registered agent name and registered agent address of the nonprofit corporation’s initial registered agent;
  • The principal office address of the nonprofit corporation’s initial principal office;
  • The true name and mailing address of each incorporator;
  • Whether or not the nonprofit corporation will have voting members;
  • Provisions not inconsistent with law regarding the distribution of assets on dissolution; and
  • Characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members.
If the Nonprofit Act conditions any matter on presence in bylaws, when is the condition satisfied?

The condition is satisfied if such provision is present either in the articles of incorporation or bylaws.

If the Nonprofit Act conditions any matter on absence of a provision in bylaws, when is the condition satisfied?

The condition is satisfied only if such provision is absent from both the articles of incorporation and bylaws.

When is a nonprofit corporation incorporated?

A nonprofit corporation is incorporated when articles of incorporation are filed with the secretary of state.

Who adopts bylaws?

Bylaws may be adopted by:

  • Directors, if named in articles
  • Incorporator, if directors not named in articles
  • Members, if neither directors or incorporator have adopted 
Is the purpose of a nonprofit corporation very broad?

Every nonprofit corporation incorporated under the Nonprofit Act has the purpose of engaging in any lawful business or activity unless a more limited purpose is stated in the articles of incorporation.

What are the general powers of a nonprofit corporation?

Unless limited in the articles, the nonprofit corporation has the following powers:

  • To sue and be sued, and defend in its name;
  • To have a corporate seal;
  • To make and amend bylaws;
  • To purchase, receive, lease, and otherwise acquire, and to own, hold, improve, use, and otherwise deal with, real or personal property or any legal or equitable interest in property, wherever located;
  • To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property; Note: in pre-CCIOA PUD, association can convey common elements without owner vote, unless otherwise provided in governing documents.
  • To purchase, receive, subscribe for, and otherwise acquire shares and other interests in, and obligations of, any other entity; and to own, hold, vote, use, sell, mortgage, lend, pledge, and otherwise dispose of, and deal in and with, the same;
  • To make contracts and guarantees, incur liabilities, borrow money, issue notes, bonds, and other obligations, and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income; (Note: in pre-CCIOA community, specific authority to pledge future income is not required and in pre-CCIOA or post-CCIOA community, owner vote is only required if provided for in governing documents)
  • To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment; except that a nonprofit corporation may not lend money to or guarantee the obligation of a director or officer of the nonprofit corporation;
  • To be an agent, an associate, a fiduciary, a manager, a member, a partner, a promoter, or a trustee of, or to hold any similar position with, any entity;
  • To conduct its activities, locate offices, and exercise the powers granted by the Nonprofit Act within or without this state;
  • To elect or appoint directors, officers, employees, and agents of the nonprofit corporation, define their duties, and fix their compensation;
  • To pay pensions and establish pension plans, pension trusts, profit sharing plans, and other benefit or incentive plans for any of its current or former directors, officers, employees, and agents;
  • To make donations for the public welfare or for charitable, religious, scientific, or educational purposes and for other purposes that further the corporate interest;
  • To impose dues, assessments, admission, and transfer fees upon its members;
  • To establish conditions for admission of members, admit members, and issue or transfer memberships;
  • To carry on a business;
  • To make payments or donations and to do any other act, not inconsistent with law, that furthers the affairs of the nonprofit corporation;
  • To indemnify current or former directors, officers, employees, fiduciaries, or agents;
  • To limit the liability of its directors as provided in section 7-128-402 (1); and
  • To cease its corporate activities and dissolve.
How long does a corporation exist?

A corporation has perpetual duration unless a shorter period is identified in the articles of incorporation.

What is the effect of failing to hold an annual meeting when required by bylaws or in accordance with resolution of the board of directors?

Failure to hold an annual or regular meeting at the time and date determined in bylaws does not affect the validity of any corporate action and does not work a forfeiture or dissolution of the nonprofit corporation.

Who has authority to call a special meeting?

The following people have the authority to call a special meeting:

  • The board of directors or a person or persons authorized in the bylaws or resolution of board of directors may call a special meeting;
  • On written demand for the meeting stating the purpose or purposes for which it is to be held, signed and dated by members holding at least 10% of all votes entitled to be cast on any issue proposed to be considered may sign and date a written demand for a special meeting.  The demand must state the purpose of the meeting.

Note: CCIOA Section 308 regarding meetings applies to both pre-CCIOA and post-CCIOA communities and states special meeting may be called by members holding 20% of votes in the association or such lower amount as provided in Bylaws.  Since CCIOA controls over Nonprofit Act and this is a conflict, presumably CCIOA will control.

What is the record date for determining members entitled to notice and vote at special meeting?

The record date is the later of:

  • The earliest of any of the demands pursuant to which the meeting is called, or
  • The date that is sixty days before the date the first of such demands is received by the nonprofit corporation.
When does the board have to call a special meeting that has been requested by the members?

The nonprofit corporation must provide notice of a special meeting within 30 days of the date of receipt of the demand for notice. 

When can the members requesting a special meeting call the meeting?

If notice for a special meeting demanded by members is not given by the board within 30 days after the date of delivery of the demands to a corporate officer, a person signing the demand or demands may set the time and place of the meeting and give notice.

What must be included in a written ballot in lieu of a meeting?

The solicitation for vote by written ballot must:

  • Indicate the number of responses needed to meet the quorum requirements
  • State the percentage of approvals necessary to approve each matter other than election of directors
  • State the time by which a ballot must be received by the association to be counted
  • Be accompanied by written information sufficient to permit each person to reach an informed decision
Can a written ballot be revoked?

A written ballot cannot be revoked unless otherwise provided in the bylaws.

When is a written ballot valid?

Approval by written ballot is valid when the number of votes exceeds the quorum required to be present at a meeting and the number of approvals equals or exceeds the number of votes required to approve the matter at a meeting.

What is the procedure by which a member may appoint a proxy?

Appointment of proxy is made by:  

  • Signing an appointment form either personally or by a member’s attorney-in-fact
  • Transmitting or authorizing the transmission providing a written statement of the appointment to the proxy or to the nonprofit corporation
When does a proxy appointment become effective and how long is it valid?

A proxy is effective against the nonprofit corporation when received and the appointment is valid for 11 months unless a different period is expressly provided.

How can a member revoke a proxy?

Appointment of a proxy is revoked by attending a meeting or by signing and delivering to the secretary either a written statement stating appointment of proxy is revoked or a subsequent appointment form.

Does death or incapacity automatically revoke a proxy?

Death or incapacity of the member appointing a proxy does not affect the right of the nonprofit corporation to accept the proxy’s authority unless notice of death or incapacity is received before proxy holder exercises authority.

What is the statutory default quorum requirement under the Nonprofit Act?

The statutory default quorum requirement is 25% of members present in person or by proxy.

(Note: This provision only applies to pre-CCIOA communities since quorum requirement for post-CCIOA communities only is set forth in CCIOA (10% if > 1000 units and 20% if 1000 units or less.)

Does a member have to stay for the entire meeting to count toward the quorum?

No.  Once member is present at meeting, they are deemed present for the entire meeting for purposes of quorum requirement.

For purposes of voting, how many votes are required for matters other than election of directors?

For purposes of voting, if quorum is met, other than for voting on directors, votes require majority of those voting.

What are the qualifications of directors?

A director must meet the following criteria:

  • Director must be an individual
  • Director need not be resident of Colorado or member of the nonprofit corporation unless the bylaws so provide
  • Bylaws may establish other qualifications for directors
What is the terms of a director if not otherwise provided in the Bylaws?

One year.

If the board decreases the number of directors, can it get rid of a director?

A decrease in the number of directors cannot shorten the term of a director.

What happens when a director’s term expires if a new director cannot be elected (e.g., no quorum at meeting, no volunteers)?

Despite expiration of a director’s term, a director continues to serve until the director’s successor is elected, appointed or designated and qualifies or until there is a decrease in the number of directors.

How long does a director serve who is filling a vacancy?

Unless otherwise provided in bylaws, a director filling a vacancy serves for balance of unexpired term.

Is cause required to remove a director?

No.  Directors may be removed without cause unless bylaws allow removal only for cause.

(Note: Post-CCIOA communities can require no more than 2/3 of the members present and voting at a meeting called for the purpose of removing the director.  Most pre-CCIOA communities allow removal by a majority of all members.)

How many votes are required to remove a director?

The number of votes to remove a director must at least equal the number of votes to elect and removal may be only at a meeting called for that purpose.

Can the Board remove a director the board has appointed to fill a vacancy?

The board cannot remove a director elected by the board to fill a vacancy.

Unless otherwise provided in the bylaws, if a vacancy occurs, including a vacancy resulting from an increase in the number of directors who fill the vacancy?

Under the Nonprofit Act:

  • The voting members may fill the vacancy;
  • The board of directors may fill the vacancy; or
  • If the directors remaining in office constitutes fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office

(Note: Typically bylaws provide for directors to fill vacancy.)

What is the procedure for the board to take action without a meeting?

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