Read More »" /> Knowing Your Governing Documents. Randal A. Pentiuk; Pentiuk, Couvreur & Kobiljak | National Cooperative Law Center - Part 2

Knowing Your Governing Documents

        The National Housing Act is incorporated through the Regulatory Agreement but sometimes the Articles will incorporate the Act. It may be amended by Congress. Its duration depends on how it is incorporated. If only incorporated through Regulatory Agreement, it ends when the Regulatory Agreement expires. If incorporated through the Articles, you need to check that language; as it may affect the scope or operation of the cooperative inadvertently, even beyond the existence of the Regulatory Agreement. Associated with the Housing Act is the Code of Federal Regulations for HUD, as a supplement to the Act, as a means of fleshing out the Congressional intent of the Act.

C. State Corporate Law Environment

        The Nonprofit Corporation Act defines the parameters of corporate affairs. Of importance are mandatory provisions that all corporations must place in their articles or bylaws, and permissive provisions that corporations may take advantage of by placing them into the articles or bylaws. An example is the relatively new provisions that limit liability on directors and officers, as well as other volunteers – if adopted by the corporation.

        If the articles and bylaws are silent, the Act may furnish direction. Other mandatory requirements are found in Act. For example, filing of the annual report with State is required in order to maintain corporate status. Failure to do so in Michigan results in loss of corporate status. If sued, you do not have a corporate shield to protect the individual members from personal liability. In addition, some one else may take your corporate name.

        In Michigan, attached to the end of the Nonprofit Corporation Act is a chapter that deals specifically with cooperatives. It allows a housing cooperative to opt in in order to take advantage of its provisions. Thus, it is important to know whether your cooperative did so, because it has provisions that are inconsistent with the other sections of the Nonprofit Corporation Act.

D. Robert’s Rules of Order

        While not normally thought of as a governing document Roberts Rules has this status since the Bylaws often make it the fall back resource to supply parliamentary procedure when the articles and bylaws are silent. A couple examples of important procedures to know are the motion for reconsideration which may be made by one on the prevailing side – so if you are going to lose a vote because others who support your position are not present, you may want to vote with the majority present in order to preserve your right to bring it up again; and the motion to adjourn, which is always in order and not debatable. Likewise, a motion to table is not debatable and may be made at any time during the discussion of an issue where a motion is pending.

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