SELECTED 2023 DEVELOPMENTS IN NONPROFIT ORGANIZATIONS LAW AND NONPROFIT ORGANIZATIONS COMMITTEE HIGHLIGHTS

Written by Steven Chiodini and Joel S. Corwin^*

The Nonprofit Organizations (NPO) Committee is pleased to report that in 2023, two California legislative bills initiated by the committee were signed into law by Governor Newsom:

On July 27, 2023, the Governor signed into law Assembly Bill 231, 2023-2024 Reg. Sess. (Cal. 2023) (AB 231), which was co-sponsored by the Corporations Committee. It had previously passed the Assembly and Senate unanimously and without opposition. AB 231, which took effect on January 1, 2024, allows for fully remote non-emergency member meetings for California nonprofit public benefit, mutual benefit, religious, and cooperative corporations, in the same way that existing law allows for such non-emergency shareholder meetings for general California corporations.

In this way, AB 231 treats member meetings of nonprofit and cooperative corporations the same way that it (and current law) treats shareholder meetings of general corporations. The bill also clarifies that, notwithstanding the absence of consent from shareholders or members, as applicable, if the meeting is conducted on or before December 31, 2025, a corporation may offer, in addition to a remote audiovisual feed, an audio-only means by which a shareholder, member, or proxyholder may participate, provided that the choice between participating via audiovisual or via audio-only means is made by the shareholder, member, or proxyholder, and the corporation does not impose any barriers to either mode of participation.