How2Day: Pennsylvania Nonprofit Corporation Laws

Pennsylvania state law provides specific rules for nonprofit corporations that are separate from for-profit enterprises. These laws are laid out in Title 15, Chapters 51 through 59 of Pennsylvania's Consolidated Statutes. You should always consult a qualified legal professional before undertaking an enterprise such as starting a nonprofit corporation. Having a basic familiarity with the law will help you be prepared and know specifically what type of assistance you need.

Nonprofit corporations don't have shareholders. They have members. Membership is addressed in Chapter 53, Sub-Chapter E of Pennsylvania's Consolidated Statutes. This chapter gives nonprofits the right to make different classes of members, and the law states that requirements for different classes must be reasonable and expressed in the bylaws. Rules pertaining to different membership classes must be enforced equally throughout the membership class. Members of nonprofits are entitled to one vote per person unless the bylaws state otherwise. State law prohibits members of a nonprofit from selling their votes for money or anything else of value.

State law allows nonprofit corporations to merge and consolidate in much the same manner as for-profit enterprises. To perform such a merger, each corporation must provide notice to its membership. Members must be informed of the impending merger even if they hold no right to vote under the nonprofit's bylaws. The proposed merger plan, or a summary of the plan, must be presented to all members. The surviving nonprofit must provide a copy of the new bylaws to any member upon request at no cost.

Conversely, nonprofit corporations may be split up into two or more corporations. Plans for division that do not change the general manner in which the nonprofit is incorporated do not require member approval. Sale and transfer of nonprofit assets will similarly not require membership approval upon division if the members would not have to otherwise approve as in the case of sale or donation of the property.

Nonprofits may require that members make capital contributions as a condition of membership. Capital contributions can include either money or property. Contributions must be fixed and set in the bylaws. The contribution requirement can apply to all members or only certain classes of members. Additionally, the law allows nonprofits to require different donation levels from different classes of membership. Nonprofits must keep records of such contributions. Unless specifically stated otherwise in the bylaws, nonprofit memberships based on contributions cannot be transferred from one person to another.

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