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Howdy

Howdy partner
How ya doin’?
Good.
Are ya goin down at the saloon tonight?
Nah, not me. That saloon is full of namby-pamby city slickers. I don’t go there anymore. And
besides, I’m a trustee now, and we got all that sorts of meeting tom’rrow mornin’. ya know, for our
Vaquero and Waddie’s Association
How’s that goin’?
Oh ya know, it’s fine. We got like 25 trustees and 200 members

I. Trustees & Officers

 Venue: Board of Trustees Meeting

 Characters: (I don’t know – ask Joe)

 Time Allotment: 8 Minutes

 Topics
1. Number of Trustees
2. Qualification
3. Term
4. Mode of Election
5. Vacancy

Section 92. Election and term of trustees


1. NUMBER OF TRUSTEES

 A non-stock corporation may have more than 15 trustees as provided under section 92. It
should be noted that the number of incorporating trustees shall not be more than 15
following section 14.
o Rationale
 The reason for allowing non-stock corporations to have more than 15 trustees
is to give more representation to the Board of Trustees of nationwide
membership associations.
o Principle of delegation of corporate management
 The board is supposed to be small in number so that it may easily muster a
quorum to act on urgent matters.
 There is no maximum limit under the code but according to an SEC Opinion (21 August 1997),
the number of trustees should not exceed the number of members of the non-stock
corporation.
 The same Opinion ruled that the SEC may question the propriety of a large number if it feels
that the number is unreasonable under the surrounding circumstances.
 The SEC has adopted a policy of requiring registrant corporations to submit an
explanation/justification if its AOI provide for more than 15 trustees.

2. QUALIFICATIONS

 Section 92 provides for only one qualification of a trustee which is membership in the
corporation.
o Membership is a continuing qualification.
o Hence, if a trustee ceases to be a member of the corporation, he can no longer act as
a trustee.
 Other qualifications may be prescribed by the corporation’s by-laws.
 A juridical person (i.e. corporation) is not qualified to be a trustee. (sec. 25)
o The SEC ruled in an Opinion (2 Sept 1991) that if the by-laws of the corporation
expressly provides that authorized representatives of juridical persons are to be
considered as “members” for the purpose of qualifications, then they may be elected
as trustees.

3. TERM

 Trustees first elected


o Section 92 states that unless otherwise provided in the AOI or the by-laws, the terms
of office of the trustees first elected are staggered with a 1-year interval.
o The term of office may vary as the AOI or by-laws may provide. It may be staggered
or fixed.
o Lifetime or unlimited term of the trustees is not allowed as it will deprive other
members of the opportunity to participate in the management of the corporation.
o If there is no such provision, the trustees shall classify themselves that the
term of office of 1/3 of their number shall expire every year.
 Trustees subsequently elected
o Trustees subsequently elected shall have a term of 3 consecutive years.
o But their terms of office also vary under the AOI or by-laws.

4. MODE OF ELECTION

 The right to vote may be limited, broadened, or denied by the AOI or by-laws. (See section 89
– voting rights)
 The by-laws may provide for the election.
 Election by district
o A form of limitation on the voting rights of the members of a non-stock corporation as
recognized under section 89.
 Election of officers
o Under section 92, the AOI or by-laws may provide for election of officers of a non-stock
corporation. Thus, it may authorize the board to elect the officers.
o If there is no provision, officers shall be directly elected by the members.

5. VACANCY

 Trustees may fill vacancies in the board, provided that those remaining still constitute a
quorum.

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