How Extensive is Authority Of Nonprofit Corporation?
PA court says nonprofit may do anything not “clearly unrelated” to its stated purpose
How extensive is the authority of the board of directors of a nonprofit corporation to act? The Pennsylvania Supreme Court has come up with an answer for entities incorporated under the Pennsylvania Nonprofit Corporation Law (“NCL”): “a nonprofit corporation’s action is authorized when: 1) the action is not prohibited by the NCL or the corporation’s articles [of incorporation]; and 2) the action is not clearly unrelated to the corporation’s stated purpose.” ( Zampogna v. Law Enforcement Health Benefits, Inc. , Supreme Ct., PA, No. 40 EAP 2014, 11/22/16. ) The issue arose in an appeal from a Commonwealth Court decision holding that a nonprofit health insurance benefit administrator could not...
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