AB 231

Bill Subjects

Abstract

Existing law authorizes and regulates the formation and operation of a nonprofit public benefit corporation, nonprofit mutual benefit corporation, nonprofit religious corporation, or cooperative corporation. Existing law authorizes meetings of members to be held at any place as stated or fixed in the bylaws, as specified, and provides that, subject to certain conditions, members not physically present may participate in a meeting, be deemed present, and vote by electronic transmission by and to the corporation, electronic video screen communication, conference telephone, or other means of remote communication. Existing law prohibits conducting a meeting of members solely by electronic transmission, electronic video screen communication, conference telephone, or other remote communications unless all of the or members consent, the board determines it is necessary or appropriate because of an emergency, as defined, or if the meeting is conducted on or before June 30, 2022. Existing law, the General Corporation Law, additionally authorizes corporations not governed by other specified state laws to conduct a meeting of shareholders solely by electronic transmission by and to the corporation, electronic video screen communication, conference telephone, or other means of remote communication if the meeting is conducted on or before December 31, 2025, as specified, and includes a live audiovisual feed for the duration of the meeting. Existing law provides that a de minimis disruption of an audio, visual, or audiovisual feed does not require a corporation to end a shareholder meeting under, or render the corporation out of compliance with, the above-described provisions. This bill would authorize corporations conducting a meeting on or before December 31, 2025, as described above, to offer, in addition to the live audiovisual feed, an audio-only means of participation. The bill would grant the shareholder or proxyholder the right to choose whether to participate via audiovisual or audio-only means and would prohibit the corporation from imposing any barriers on either mode of participation. The bill would provide that a de minimis disruption of an audio or audiovisual feed does not require a corporation to end a shareholder meeting under, or render the corporation out of compliance with, those provisions. The bill would extend those same provisions to a nonprofit public benefit corporation, nonprofit mutual benefit corporation, nonprofit religious corporation, or cooperative corporation holding a meeting of members. Existing law requires a corporation to implement reasonable measures when it conducts a meeting of shareholders solely by specified means of remote communication. The General Corporation Law requires a corporation not governed by other specified state laws to verify that a person who has voted remotely is a shareholder or proxyholder. Existing law requires a nonprofit public benefit corporation, nonprofit mutual benefit corporation, nonprofit religious corporation, or cooperative corporation to verify that each person participating remotely is a member or proxyholder. This bill would instead require a nonprofit public benefit corporation, nonprofit mutual benefit corporation, nonprofit religious corporation, or cooperative corporation to verify that person who has voted remotely is a member or proxyholder, thereby aligning those corporations with the parallel requirement set forth in the General Corporation Law. Existing law requires a cooperative corporation or a corporation not governed by other specified state laws to provide members or shareholders, and proxyholders as applicable, a reasonable opportunity to participate in a meeting conducted by remote communication, including an opportunity to read or hear the proceedings of the meeting concurrently with those proceedings. Existing law requires a nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation to provide members and proxyholders a reasonable opportunity to participate in a meeting conducted by remote communication, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with those proceedings. This bill would instead require a nonprofit public benefit corporation, nonprofit mutual benefit corporation, or nonprofit religious corporation to provide members and proxyholders an opportunity to read or hear the proceedings of the meeting concurrently with those proceedings, thereby aligning those corporations with the parallel requirements set forth in the Cooperative Corporation Law and in the General Corporation Law.