When you provide information for your project, you may be asked to list key personnel within the organization. States generally limit signing forms on behalf of the organization to people who hold certain positions within the organization.
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Many nonprofit corporations have complex governance structures. When it comes to annual reports and other state filings for corporations, most states will require an “officer” to sign. This article will help you define and clarify the roles within your organization.
Shareholders & Ownership
Unlike profit corporations and LLCs, nonprofit corporations do not have ownership interests.
Almost all states prohibit nonprofit corporations from issuing stock. A few states do allow nonprofits to issue shares that do not provide dividends to the shareholders. A nonprofit organization does not have an owner, although it does have obligations to state and federal agencies and to the general public.
Generally speaking, a nonprofit corporation cannot be bought or sold. If the organization ceases operations, it usually must settle its debts and distribute any remaining assets to another nonprofit organization before it can be dissolved.
The officers of a corporation are in executive-level roles. The board of directors appoints the officers of a corporation according to company bylaws.
Officers may be members of the board of directors, or they may be hired or designated by the board of directors to manage the daily affairs of the corporation. Corporation officers almost always have the authority to legally bind or act on behalf of the organization.
Here are some common corporation officer roles.
President: This is the individual in charge of the corporation. They oversee the daily operations of the company. The President also delegates responsibilities to other officers and employees. It is not uncommon for a person to serve as both the corporation’s President and Chief Executive Officer. However, being the Chief Executive Officer does not necessarily make someone an officer of the corporation.
Treasurer: This is the individual in charge of the financial management of the corporation. This may range from routine bookkeeping, payroll, and disbursements in a smaller corporation, to overseeing the financial operations and health in larger corporations. It is not uncommon for a person to serve as both the corporation’s Treasurer and Chief Financial Officer. However, being the Chief Financial Officer does not necessarily make someone an officer of the corporation.
Secretary: This is the individual responsible for keeping corporate records and minutes of board and shareholder meetings. In the meeting minutes, the Secretary will record the names of those present, the outcomes of any votes or major decisions, and any additional formalities.
Vice President: The board of directors may designate one or more Vice Presidents to assist in the administration of the corporation. The duties of the Vice President vary by company, but they are generally expected to fill the role of President in their absence. As with other officer roles, this shouldn't be confused with a job title, such as "Vice President of Sales."
Board of Directors
The board of directors is the corporation’s governing body. Directors (also known as board members) are elected by the shareholders. Collectively, the board’s role is to establish policies and oversee officers and management. The board of directors holds regular meetings at which minutes are taken and makes decisions by written consent.
In some organizations, the board may elect to have a chairperson (also known as “chair” or “chairman”) lead the board of directors. In membership organizations, the members may elect a chairperson. Whether or not the organization has a chairperson and how one is elected is outlined in the organization’s bylaws.
Nonprofits are generally restricted from having too many board members related by blood, marriage, or business affiliation. This helps preserve the independence of each board member’s vote and protects against self-dealing or other conflicts of interest.
Your organization may refer to Directors as “trustees” or “board members.” It’s important to note that “board members” are different from any dues-paying members your nonprofit may have (see “Members” below).
Some nonprofit organizations choose to be governed by a set of voting members as poised to a board of directors. These members typically pay dues in exchange for their voting rights, although in some organizations, paid membership offers only access to or discounts for events and merchandise. Whether a nonprofit allows for membership will be established in the organization’s bylaws.
It’s important to remember that dues-paying members are different from “board members” (who are members of the board of directors). Members typically do not have the same authority as board members, officers, and authorized personnel. For example, they cannot enter into contracts on behalf of the organization.
Executive Director: The board of directors may elect to hire staff to administer the day-to-day operations of the organization. The first hire is typically the Executive Director. The Executive Director (also occasionally known as the CEO) oversees the daily operations of the organization. The Executive Director also delegates responsibilities to other officers and employees.
Other Executive Personnel: Your nonprofit may have designated individuals with other titles to indicate their daily responsibilities. These might include a Chief Operating Officer (COO), a Chief Marketing Officer (CMO), a Chief Information Officer (CIO), a Vice President of Development, or a Director of Donor Relations among others. In many smaller nonprofits, these roles are filled by board members or volunteers. In larger nonprofit organizations, these are generally salaried positions whose hiring, compensation, and performance are determined by the board of directors.
Many state forms instruct that an “authorized officer” may sign the document. Generally, this means any individual who holds one of the above leadership roles and who has the authority to legally bind and sign documents on behalf of the corporation.
When filing state forms, generally, the formal officer title (such as President or Secretary) is required. Some forms dictate the role of the person that must sign or may require multiple signers.
We ask that you let us know who your preferred signer is. Whenever possible, we’ll use this person on the forms. Many state forms instruct that an “authorized officer” may sign the document. Generally, this means any individual who holds one of the corporate officer roles and who has the authority to sign documents on behalf of the corporation can sign the state form.
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