Michigan Nonprofit Association Blog

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Electronic Voting Rules For Members, Shareholders and Directors of Michigan Nonprofit Corporations

There appears to be some misunderstanding in the Michigan nonprofit community about electronic voting by members, shareholders and directors of Michigan nonprofit corporations. Some nonprofit corporations have been following the practice of sending out a resolution to the members, shareholders or directors and have them vote by checking a box and returning it electronically. That is not a valid member, shareholder or director vote under Michigan law.

For director action Michigan law requires directors to vote at a validly convened directors meeting or by unanimous written consent of all directors without a meeting. Directors of a Michigan corporation cannot vote electronically.  The nearest procedure Michigan law allows for electronic voting by directors is to have all directors’ sign a unanimous directors written consent and electronically send that to the corporation. This would be valid director action since it is action by the unanimous written consent of all directors.

For members or shareholders to vote electronically they must comply with the rules for ballot voting which were adopted in Michigan in the 2015 amendment to the Michigan  Nonprofit Corporation Act. One of the requirements is that the corporation's articles or bylaws have to be amended to allow for ballot voting. After the amendment the corporation must comply with the rules for ballot voting contained in the Michigan Nonprofit Act. Members or shareholders can also act by unanimous written consent without  a meeting, or by majority of member vote by written consent if provided for in the articles of incorporation. Proxies can also be used by members and shareholders and submitted electronically.

Aside from ballot voting, voting by proxy, or action by written consent there is no procedure allowed by Michigan law for a nonprofit corporation to send a member, shareholder or director a question or issue to vote on and to have them email their vote back. A nonprofit can do this to poll the members but it is not valid member action unless they comply with the ballot voting rules, proxy rules or written consent rules.

Edward J. Castellani is an Attorney and CPA with Fraser Trebilcock Davis & Dunlap P. C. in Lansing, Michigan who specializes in nonprofit corporation law.  He may be contacted at 517-377-0845 or ecast@fraserlawfirm.com with any questions.