If you have been paying attention to the news recently, you may have heard that Gov. Newsom signed AB 231 into law. But what exactly is this bill about? And what impact is it likely to have on your organization? Read on to find out:
What Is AB 231?
California Assembly Bill 231 was introduced by Asm. Phillip Chen in January of this year. It aims to make it easier for corporations and nonprofits in the Golden State to hold important meetings.
The bill passed the Assembly and Senate unanimously and without opposition – and was signed into law by Gov. Newsom on July 27th.
How Will AB 231 Affect California Corporations?
In the state of California, corporations are required to hold a shareholders’ meeting at least once a year. Existing law allows them to conduct these meetings solely through conference call, video communication, or any other means of remote communication – if they provide a live audiovisual feed for the entire duration of the meeting.
With the passage of AB 231, California corporations can now offer an audio-only feed in addition to the live audiovisual presentation. Shareholders are free to select which of these two modes of participation they would like to use – and corporations may not impose any unnecessary barriers on either option.
These updated rules are valid on all shareholder meetings held before December 31st, 2025.
How Will AB 231 Affect California Nonprofits?
As with corporations, nonprofit organizations in the state of California are legally required to hold a meeting of their members at least once a year. The law currently permits them to conduct their meetings remotely so long as they provide a live audiovisual feed of the proceedings.
AB 231 allows nonprofits to offer their members an audio-only presentation in addition to the live audiovisual feed. The bill gives members the right to choose their preferred participation method and forbids nonprofits from creating any barriers to entry for either option.
These new rules are valid at members’ meetings that take place before December 31st, 2025.
Further, nonprofits in California are currently obligated to verify that everyone who participates in their meetings is a member or a proxyholder. With the passage of AB 231, this rule will change.
Moving forward, California nonprofits will only be required to verify the identity of individuals who actually cast a vote in their meetings.
Your Knowledgeable San Diego Business Attorney
Do you have questions about the impact the passage of AB 231 will have on your next meeting? If so, please do not hesitate to get in touch with the knowledgeable team here at the Semanchik Law Group. We have an in-depth understanding of business and nonprofit law, and we would be more than happy to provide you with all the information you need!
To set up a consultation, all you need to do is give us a call at (619) 535-1811 or fill out our short online contact form. We look forward to assisting your organization!
