Iowa Code 504.622 – Termination, expulsion, or suspension
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1. A membership in a public benefit or mutual benefit corporation may be terminated or suspended for the reasons and in the manner provided in the articles of incorporation or bylaws.
Terms Used In Iowa Code 504.622
- articles: includes amended and restated articles of incorporation and articles of merger. See Iowa Code 504.141
- Bylaws: means the code or codes of rules other than the articles adopted pursuant to this chapter for the regulation or management of the affairs of a corporation irrespective of the name or names by which such rules are designated. See Iowa Code 504.141
- Class: means a group of memberships which have the same rights with respect to voting, dissolution, redemption, and transfer. See Iowa Code 504.141
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means a public benefit, mutual benefit, or religious corporation. See Iowa Code 504.141
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Member: means a person who on more than one occasion, pursuant to the provisions of a corporation's articles or bylaws, has a right to vote for the election of a director or directors of a corporation, irrespective of how a member is defined in the articles or bylaws of the corporation. See Iowa Code 504.141
- Membership: refers to the rights and obligations a member or members have pursuant to a corporation's articles, bylaws, and this chapter. See Iowa Code 504.141
- Person: includes any individual or entity. See Iowa Code 504.141
- Proceeding: includes a civil suit and criminal, administrative, or investigatory actions. See Iowa Code 504.141
- year: means twelve consecutive months. See Iowa Code 4.1
2. To the extent the articles of incorporation or bylaws do not address the termination or suspension of a member, a member of a public benefit or mutual benefit corporation shall not be expelled or suspended, and a membership or memberships in such a corporation shall not be terminated or suspended except pursuant to a procedure which is fair and reasonable and is carried out in good faith.
3. A procedure is fair and reasonable when either of the following occurs:
a. The articles or bylaws set forth a procedure which provides both of the following:
(1) Not less than fifteen days’ prior written notice of the expulsion, suspension, or termination and the reasons therefor.
(2) An opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension, or termination by a person or persons authorized to decide that the proposed expulsion, termination, or suspension not take place.
b. The procedure requires consideration of all relevant facts and circumstances surrounding the expulsion, suspension, or termination by a person or persons authorized to make a decision regarding the proposed expulsion, termination, or suspension.
4. Any written notice given by mail pursuant to this section must be given by first class or certified mail sent to the last address of the member shown on the corporation’s records.
5. A proceeding challenging an expulsion, suspension, or termination, including a proceeding alleging defective notice, must be commenced within one year after the effective date of the expulsion, suspension, or termination.
6. A member who has been expelled or suspended may be liable to the corporation for dues, assessments, or fees as a result of obligations incurred or commitments made prior to expulsion or suspension.