QUESTION
How do I remove corporate officers who have access to all finances?
Asked on Jan 17th, 2014 on Business Law - California
More details to this question:
I am an officer of a charitable corporation. This corp is incorporated seperatly from it's chartering parent. Each officer takes turns in sussesion as President with full powers of this office. Several long-standing and experianced officers are deligated powers to run the day-to-day operations. These officers include trustees of a valuable building and property owned by the corp and the revenue gained from store front rentals, secretary and treasurer. These officers have been found to be commiting violations against our bylaws, false and doctored reports and misuse of funds. I will be sitting as president shortly and know that these officers need to removed, locks changed and accounts secured. I cannot involve the parent body as running the risk of the corp loosing its charter. I feel that in removing these officers risks the corp of being flocked of all its assets by them who have control over the same. The action has to be fast with no time for mistakes.
1 ANSWER
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The most critical concern you listed is the improper handling of the nonprofit's assets. This answer will assume that as President, you can direct the bank and other entities which hold the assets to take action. Based on that assumption, upon being seated as President, you can change the authorizations through the Bank regarding assets within the Bank. The next step would be to have an audit or review audit of the books and records. With regard to changing the locks on the building, again, I assume as President you would have the authority to take that action without removal of directors.
With regard to the other issues raised in your question, to wit: removal of the officers, to answer this question would require a review of your corporate documents, e.g. bylaws and other relevant documents. Your corporate documents should spell out the method of removing a director.
It sounds like you have your hands full with this matter, good luck in protecting the nonprofit.
Answered on Jan 19th, 2014 at 1:00 PM