--Not Above Board
“The bylaws will most likely address and establish the qualifications for board members. Some bylaws expressly state that the board member candidate must be an owner; some bylaws have more expansive qualifications; and some bylaws are silent as to qualifications. If the bylaws are silent, then the applicable corporation act should be reviewed. For instance, N.J.S.A. 15A:6-1 states that a nonprofit corporation trustee must be 18 years of age and need not be a resident of New Jersey or a member of the cooperative corporation “unless the certificate of incorporation or bylaws so require”. In addition, the New Jersey Nonprofit Corporation Act permits the cooperative’s certificate of incorporation or bylaws to prescribe other qualifications for trustees. Therefore, if the cooperative’s bylaws and certificate of incorporation are silent as to qualifications, the resident spouse would be qualified to run for election to the board.
“If the cooperative association documents (bylaws or certificate of incorporation) require board members to also be owners, the resident spouse may be able to qualify by acquiring an interest in the cooperative shares and that interest may be nominal. Any such transfer would, however, be subject to the cooperative association’s governing documents and requirements regarding the sale or other transfer of shares. Absent an express provision precluding or requiring more than a nominal shareholder interest, following such transfer, the resident spouse, now a nominal co-owner, would then be qualified. Of course, any transfer of spousal interest should take into consideration gift and estate tax ramifications.”