NP Articles Change

Background:

In 2004, the NP board approved a change to the Articles of Incorporation for NASCO Properties. This change in the articles was meant to bring them up to date, since NP is no longer the strictly-for-students organization that it was expected to be back in the 1980s. The change in the articles was never filed with the state and the IRS, which any corporation is supposed to do. The changes that were made (but never registered) in 2004 were still seen as being good changes to make in 2009.

After the change to the articles was approved for official filing, Jim pointed out that there was a technical problem with the articles. This was just before he needed to provide a copy of our articles to a lender, and rather than wait for the board to come up with new and corrected articles, it was decided to rescind the change and take the issue up later.

From the December 09 Exec Minutes:

The article changes passed at the recent meeting have some technical problems. Jim has to file some paperwork with our Articles, but he doesn't want to use the newly approved version, with the problems. So if the board could rescind the changes for now, he can file, and we can approach an improved version of these changes in the future. Basically, we approved changes which referred to the "members" of NP, but NP does not have true membership.

Corrigan moves to rescind the change to the articles, allowing Jim to file our old Articles with our lenders. Liam seconds. Motion passes with no objection or abstention.

From Jim's email of 12-2-09 that led to this article change being repealed:

"To promote the social and welfare of the community by developing low-rent housing for university students its members, regardless of race, creed, color, sexual orientation or national origin and thus influence the community to eliminate prejudice and discrimination in housing."

The problem is that NP doesn't have members. The leasing groups sometimes think of themselves and their own members as members of NASCO Properties, which is fine except that it isn't true. NP is a directorship, as defined by state law, and has to be due to our tax status. It is not and can't be a membership organization.

So unless someone has another rationale for this change in the articles that would make it okay, I'd just as soon not file this change right now, but rather put it on the agenda for the next board meeting. The intent of the change is clear, but I do believe (and I'm not a lawyer), that the wording needs to change.

-Jim

From the 2004 meeting minutes making the original change:

Vlach suggests that Article II (1) be changed to replace “university students” with “members,” and this is accepted by the group. Weinberg suggests striking the first “and” from Article II (1), and this is also accepted by the group. Lincoln Miller suggests adding “familial status” to Article II (1), but this is not accepted. Fredricksen asks to include “ability” to this list in Article II (1), but this is not accepted. Guerrero asks to insert “its” before the new word “members” in Article II (1), and this is accepted by the group. Bratten suggests deleting the word “student” from the first sentence of Article X, and also dropping the word “campus” from the phrase “campus housing cooperatives” in the first sentence of paragraph two in Article X. This is accepted by the group. Fredricksen moves to approve the Articles of Incorporation as amended, and Guerrero seconds. Articles as changed are approved by unanimous vote.

The revised sections now read:

ARTICLE II

1. To promote the social welfare of the community by developing low-rent housing for its members, regardless of race, creed, color, sexual orientation or national origin and thus influence the community to eliminate prejudice and discrimination in housing.

ARTICLE X

The property of the organization is irrevocably dedicated to the education about and development of nonprofit housing cooperatives. No part of the net income or assets of the corporation shall ever inure to the benefit of any directors, officer or member thereof or to the benefit of any private person.

Upon the dissolution or winding up of the organization, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future federal tax code, to an organization which is organized and operated exclusively for education about and development of nonprofit housing cooperatives. Distribution shall be made by the board of directors, or, if no board of directors exists, a court of law. To assist the court in its determination, the organization suggests that the assets be donated to the Campus Cooperative Development Corporation, or barring its existence or qualification under section 501(c)(3) or its successor code, the Cooperative Development Foundation.

Revising the Articles

So these changes seemed like a good idea 6 years ago, and they seemed like a good idea 6 months ago. There are several options for what to do now.

• 1. Do nothing, leave the articles in their 2003 state.

  2. Adopt the changes discussed in December of 2009, but substitute "members" for another word or phrase. Perhaps "leasing coops" or "associated coops".

  3. Adopt different changes.

- Daniel Miller, May 2010