Does a resignation from a Board of Directors remove liability for the resignee from that point forward?

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Does a resignation from a Board of Directors remove liability for the resignee from that point forward?

If I resign from a Board of Directors of a 501(c)3, does that remove me from liability for that entity?

Asked on June 3, 2009 under Business Law, Idaho

Answers:

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

A non-profit corp. is just like a corporation with respect to board of directors.  By you resigning you are no longer charged with the duties and responsibilites of operatng the company.  However, if someone was to file a lawsuit against you personally for unlawful acts you performed before you resigned, then you will have to deal with these charges becasue nonprofit officers can be hed personally liable for their unlawful acts committed within the scope of their duties for the nonprofit corp. Nevertheless, as far as looking at this from a going forward basis, you are no onger exposed.

L.M., Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

It removes you from liability for that entity should anything actionable occur after your departure.  Should something come up that occurred while you were still sitting on the board, the fact that you no longer are will be irrelevant.  You would be liable if the board is liable.  I always advise people who sit on 501(c)3 boards to make sure the entity has the appropriate liability insurance to protect its board members.  Does this one?  Better find out just in case.


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