[CCWG-ACCT] Memo on Fundamental Bylaws & Legal Liability of Members

Sat Jun 20 21:15:43 UTC 2015

Arun: the CCWG proposal wasn't to create this power, so it may be that the
analysis you offer is correct, but not directed at what was in the proposal.

In the fundamental bylaws part of the proposal, what is contemplated is a
co-decision process, with the Board and the community (however constituted)
having to agree to fundamental bylaws changes. Para 124 sets this out.

The CCWG has not proposed giving the power to any entity other than the
staff/Board being the formal initiator of a Fundamental bylaws
change/addition.

As such, my reading of our proposal is that it represents a restriction of
the powers of the Board consistent with the section I pasted.

If the proposal was that the community mechanism be formally able to
propose bylaws changes, that would seem to fall into the problem your memo
sets out?

best

On 20 June 2015 at 18:09, Arun Sukumar <arun.sukumar at nludelhi.ac.in> wrote:

> Hi Jordan, this provision allows the community to restrict the powers of
> the board, yes. But to your reading, does it grant the community the right
> to create/approve bylaws without Board approval?
>
> Is limiting the Board's right to change bylaws = empowering the community
> to make them without approval? Forgive me for lawyering here, but one
> conclusion does not seem necessarily to lead to the other!
>
> On Sat, Jun 20, 2015 at 5:43 PM, Jordan Carter <jordan at internetnz.net.nz>
> wrote:
>
>> hi Arun
>>
>> s5150 of the Code is where I draw it from, copied below.
>>
>> best,
>> Jordan
>>
>> 5150.  (a) Except as provided in subdivision (c), and Sections 5151,
>> 5220, 5224, 5512, 5613, and 5616, bylaws may be adopted, amended or
>> repealed by the board unless the action would materially and
>> adversely affect the rights of members as to voting or transfer.
>>    (b) Bylaws may be adopted, amended or repealed by approval of
>> members (Section 5034); provided, however, that such adoption,
>> amendment or repeal also requires approval by the members of a class
>> if that action would materially and adversely affect the rights of
>> that class as to voting or transfer in a manner different than that
>> action affects another class.
>>    (c) The articles or bylaws may restrict or eliminate the power of
>> the board to adopt, amend or repeal any or all bylaws, subject to
>> subdivision (e) of Section 5151.
>>    (d) Bylaws may also provide that repeal or amendment of those
>> bylaws, or the repeal or amendment of specified portions of those
>> bylaws, may occur only with the approval in writing of a specified
>> person or persons other than the board or members. However, this
>> approval requirement, unless the bylaws specify otherwise, shall not
>> apply if any of the following circumstances exist:
>>    (1) The specified person or persons have died or ceased to exist.
>>    (2) If the right of the specified person or persons to approve is
>> in the capacity of an officer, trustee, or other status and the
>> office, trust, or status has ceased to exist.
>>    (3) If the corporation has a specific proposal for amendment or
>> repeal, and the corporation has provided written notice of that
>> proposal, including a copy of the proposal, to the specified person
>> or persons at the most recent address for each of them, based on the
>> corporation's records, and the corporation has not received written
>> approval or nonapproval within the period specified in the notice,
>> which shall not be less than 10 nor more than 30 days commencing at
>> least 20 days after the notice has been provided.
>>
>>
>> On 20 June 2015 at 17:39, Arun Sukumar <arun.sukumar at nludelhi.ac.in>
>> wrote:
>>
>>> Hi Jordan, the California Corporate Code seems pretty clear on this: all
>>> "corporate activities", which presumably include changes in bylaws, shall
>>> be exercised under the "ultimate authority of the board".
>>>
>>> I'm frankly a little confused by the legal counsel that says changes to
>>> bylaws can be made without board approval. Where's this being drawn from? A
>>> statutory provision? If so, I'vent seen it. I suppose what the law firms
>>> could be referring to is the board passing a resolution saying, "here, we
>>> authorise you to change bylaws without approval". But that can easily be
>>> changed through another board resolution.
>>>
>>> On Sat, Jun 20, 2015 at 5:20 PM, Jordan Carter <jordan at internetnz.net.nz
>>> > wrote:
>>>
>>>> hi Arun
>>>>
>>>> Thanks for this thoughtful contribution.
>>>>
>>>> I was interested in the difference between this memo's conclusions
>>>> regarding the power to approve fundamental bylaws, and those of the legal
>>>> firms retained by the CCWG. Their view is clearly that in a member
>>>> structure, members can have approval rights for bylaws changes. The memo
>>>> you have circulated seems on first glance to conclude that they cannot.
>>>>
>>>> Am I reading this right or is it just a matter of the way it is
>>>> expressed?
>>>>
>>>> best
>>>> Jordan
>>>>
>>>> On 20 June 2015 at 16:32, Arun Sukumar <arun.sukumar at nludelhi.ac.in>
>>>> wrote:
>>>>
>>>>> Hello all,
>>>>>
>>>>> Please find attached a memo/primer from the National Law University,
>>>>> New Delhi explaining the idea of Fundamental Bylaws and examining its basis
>>>>> in California law. The document also has some research on what's known in
>>>>> some jurisdictions as courts "lifting the corporate veil", an action that
>>>>> potentially exposes members to legal liability.
>>>>>
>>>>> Hope this is useful to those who are following the CCWG's work. This
>>>>> is simply to supplement the legal advice CCWG is getting from both law
>>>>> firms.
>>>>>
>>>>> Best,
>>>>> Arun
>>>>>
>>>>> --
>>>>> -
>>>>> @arunmsukumar <http://www.twitter.com/arunmsukumar>
>>>>> Senior Fellow, Centre for Communication Governance
>>>>> <http://www.ccgdelhi.org>
>>>>> National Law University, New Delhi
>>>>> Ph: +91-9871943272
>>>>>
>>>>> _______________________________________________
>>>>> Accountability-Cross-Community mailing list
>>>>> Accountability-Cross-Community at icann.org
>>>>> https://mm.icann.org/mailman/listinfo/accountability-cross-community
>>>>>
>>>>>
>>>>
>>>>
>>>> --
>>>> Jordan Carter
>>>>
>>>> Chief Executive
>>>> *InternetNZ*
>>>>
>>>> 04 495 2118 (office) | +64 21 442 649 (mob)
>>>> jordan at internetnz.net.nz
>>>> Skype: jordancarter
>>>>
>>>> *A better world through a better Internet *
>>>>
>>>>
>>>
>>>
>>> --
>>> -
>>> @arunmsukumar <http://www.twitter.com/arunmsukumar>
>>> Senior Fellow, Centre for Communication Governance
>>> <http://www.ccgdelhi.org>
>>> National Law University, New Delhi
>>> Ph: +91-9871943272
>>>
>>
>>
>>
>> --
>> Jordan Carter
>>
>> Chief Executive
>> *InternetNZ*
>>
>> 04 495 2118 (office) | +64 21 442 649 (mob)
>> jordan at internetnz.net.nz
>> Skype: jordancarter
>>
>> *A better world through a better Internet *
>>
>>
>
>
> --
> -
> @arunmsukumar <http://www.twitter.com/arunmsukumar>
> Senior Fellow, Centre for Communication Governance
> <http://www.ccgdelhi.org>
> National Law University, New Delhi
> Ph: +91-9871943272
>

-- 
Jordan Carter

Chief Executive
*InternetNZ*

04 495 2118 (office) | +64 21 442 649 (mob)
jordan at internetnz.net.nz
Skype: jordancarter

*A better world through a better Internet *
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