Can an organization be taken over by board members without express consent of the founder?
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Can an organization be taken over by board members without express consent of the founder?
About 4 years ago a I personally started a youth basketball organization to help local youth play more ball and improve their skills. This organization is not incorporated or non-profit at this point. About a year later due to the growth of my program, I asked some parents to come help me with the administration. In order to get a business bank account, I had to have minutes from a board meeting so we had an initial board meeting naming persons to be President, Secretary, Treasurer and at large. We do not have a VP at this time. I have never signed any legal document transferring ownership of my organization to this Board, but there seems to be issues arising that I need to deal with. Do I still own this organization or did I inadvertently give away my rights to this Board? Nothing in the minutes from the initial board meeting indicate that I gave ownership away. As I stated I did not sign any legal document saying that I did.
Asked on April 11, 2011 under Business Law, New Mexico
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
You should immediately talk to an attorney who handles such entities. While this organization sounds like a great program, you need to understand there are a whole host of concerns, including personal liability against which you need to protect yourself and those of the board. If you don't have legal documents and no known form to this organization (i.e., is it non profit, sort of non profit or a for profit business), you should get this fixed because in many states such entities need to be registered not only with your secretary of state with required annual reports, but also with the State Attorney General for consumer protection issues. Consider that while in your situation you may not have given ownership away, you need to understand that it can happen if the board becomes the sole entity to make decisions and you don't have a majority vote or the bylaws do not allow you to override board vote.
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