Changes in the New Washington Nonprofit Corporation Act (SB 5034) Part 2
As detailed in a previous blog post which you can access here, the Washington state legislature passed new laws for nonprofit corporations which will go into effect January 1, 2022. Along with those changes, there are new filing documents located on the Washington Secretary of State’s website at https://www.sos.wa.gov/corps/forms.aspx.
Here is a brief recap of the changes which will take effect January 1, 2022:
Notice and Meeting Changes: The New Act permits email notices by default while allowing an opt-out option for members, directors, or officers who prefer notice in writing.
Fiduciary Duties of Members: The New Act establishes that members in general do not have fiduciary duties to the nonprofit corporations they serve.
Fiduciary Duties of Directors: The New Act establishes that directors of nonprofits have the traditional fiduciary duties of corporate directors.
Three Directors Required: The New Act requires that three directors serve on nonprofit boards. Private foundations with 501(c)(3) classification may continue to have one or two directors.
Youth can serve on the Board of Directors: The New Act allows youth to serve on nonprofit boards subject to specific conditions and limitations.
“Redomestication”: The New Act allows nonprofit corporations to “redomesticate” and change their state of incorporation if the target state allows it.
For-Profit/Nonprofit Conversion: The New Act allows for-profit corporations to convert to nonprofit status without requiring reincorporation subject to specific conditions and applicable laws. The New Act also allows for nonprofit corporations to convert to for-profit corporations.
