Emergency Legislation Modifies Massachusetts Non-profit Corporate Law Requirements

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William August, Esq. COURTESY PHOTO

 

State Legislators, on April 3, enacted Chapter 53 of the Acts of 2020, which addresses numerous pandemic-related challenges faced by Massachusetts nonprofit corporations attempting to conduct business while maintaining social distancing.  Section 16 of the new law sets forth the modifications applicable to Massachusetts nonprofit corporations for the duration of the Governor’s March 20 COVID-19 Declaration of Emergency, and for 60 days thereafter, including authorizing a nonprofit’s Board of Directors to allow the following if not prohibited by the Corporation’s Articles of Organization:

  1. Allow a director or officer to continue to serve beyond the expiration of his/her term during the state of emergency and until a successor director or officer is elected or appointed;
  2. Allow a director to participate in a regular or special meeting by, or conduct the meeting remotely through, any means of communication by which all directors are able to simultaneously communicate with each other during the meeting;
  3. Allow members at a meeting of the members to vote in person or by proxy, provided that any member voting by proxy shall be considered present at the meeting for purposes of any quorum requirement;
  4. Appoint successors to any of the officers, directors, employees or agents;
  5. Allow members (not just Directors) to participate remotely in any meeting of members subject to use of reasonable participation, voting and identification measures as further detailed in the statute; and
  6. Allow nonprofit Boards to more flexibly avail themselves of any reasonable method of giving notice of Board meetings.

As noted above, these procedural options and flexibility are allowed IF otherwise not prohibited by the nonprofit corporation’s Articles of Organization and if the procedural option is implemented by the corporation’s Board of Directors.  Note that only Section 16 of this lengthy new statute addresses emergency governance relief applicable to nonprofits.

Chapter 53 of the Acts of 2020 is one of many examples of the legislature and our legal system recognizing the need for reasonable flexibility in many sectors of society to meet the great challenges of continuing to associate and work during a pandemic where social distancing is the order of the day and other risks impede organizational continuity.  Numerous other changes to nonprofit law and state and federal emergency financial relief programs are beyond the scope of this memo which is limited to discussion of Chapter 53 of the Acts of 2020 and modifications to nonprofit governance law and procedures.  The strong support for these and other recent modifications is a reminder of the value of flexibility and innovation in dealing with this pandemic.

Feel free to contact us at 617-951-9909 or 617-951-9909 should you have any questions about this or any legal matter or just to check in and catch up.  — Bill August, Esq., Epstein & August, LLP, Cambridge, Massachusetts.