From Wesleyan Discipline
4350. The articles of incorporation or charter for the incorporation of any affiliate corporation hereafter created (other than by an educational institution, (2362; 4320), and its bylaws, shall be in accord with the following basic provisions, provided that, whenever such basic provisions shall conflict with the local laws under which the incorporation is effected, such provisions shall be modified to the extent required by local laws:
- (1) The principal purpose of an affiliate corporation shall be to augment one or more of the religious, charitable, benevolent, or educational purposes of the subsidiary corporation with which it is affiliated, and pecuniary profit shall not accrue to the members of the affiliate corporation.
- (2) The bylaws of the affiliate corporation shall be in accord with the bylaws of the subsidiary corporation with which it is affiliated, as amended from time to time, and no bylaw may be adopted by the affiliate corporation that is inconsistent with the provisions of the charter or bylaws of such subsidiary corporation or contrary to local, state, or federal laws governing the affiliate corporation. The bylaws, and any amendments thereto, shall be subject to the approval of the board of directors of the subject subsidiary corporation, and the concurrence in writing of the General Superintendent of The Wesleyan Church after the receipt of competent legal counsel (1935).
- (3) The board of directors of the subsidiary corporation shall be and constitute, or shall elect, the members of the board of directors of the affiliate corporation, and shall be and constitute the membership of such corporation, except where prohibited by local laws, and shall have the authority to remove for cause any member.
- (4) All principal officers of the affiliate corporation and at least two-thirds of the board of directors shall be Wesleyan Church members who meet the leadership qualifications (260–268; 558) or ministers of The Wesleyan Church. The affiliate corporation’s bylaws (4350:2) may provide for up to one-third (1/3) of the board of directors to be believers who are non-Wesleyan.
- (5) Except where liability is allowed by law, a member of the board of directors of the affiliate corporation may not be held personally liable for any debts, liabilities, or obligations of the corporation.
- (6) All fiscal operations, including budget, investment, and cash control, shall be under the control of a board of directors of not less than seven members.
- (7) The board of directors of the affiliate corporation, other governing board, or the General Superintendent, shall be authorized to direct an annual audit of all assets, records or other affairs of the corporation, and at any other time as it or the General Superintendent shall deem necessary, and all records shall be open to the General Superintendent and to any other representative the board of directors of the subsidiary corporation shall appoint for such a purpose (1935).
- (8) The board of directors of the affiliate corporation shall make a complete and faithful report of finances and other activities annually, and at any other time as shall be required, to the board of directors of the subsidiary corporation with which it is affiliated.
- (9) An official copy of the minutes of all meetings of the board of directors and of the financial reports shall be forwarded to the chair and the secretary of the board of directors of the subsidiary corporation for permanent filing and to the General Superintendent (1935).
- (10) The bylaws of the affiliate corporation shall establish proper safeguards for fiscal soundness, legal requirements, integrity of purpose, and protection of the assets of the corporation.
- (11) All property of the affiliate corporation, whether real, personal, or mixed, shall, in the event of the liquidation or dissolution of such corporation, devolve upon and pass to The Wesleyan Church Corporation or one of its subsidiary corporations.