Chapter 4. Consolidation Of Private Colleges of California Education Code >> Division 10. >> Title 3. >> Part 59. >> Chapter 4.

Whenever any benevolent, religious, or fraternal organization or society, having a grand lodge, assembly, conference, or other legislative or representative head in the state, and having two or more colleges or institutions of higher education under its patronage, desires, for the purpose of greater efficiency and simplicity in the administration of its educational interests, to consolidate the institutions under one management, the organization or society may consolidate the institutions under one management, pursuant to this article.

The grand lodge, assembly, conference, or other legislative or representative head having authorized a consolidation of its institutions, a new corporation shall be formed.

The board of trustees of the new corporation shall at first consist of the persons constituting the boards of trustees of the several institutions consolidating, and others. The number of trustees shall not exceed 45. The board of trustees shall be so classified that the term of office of one-third of its members expires each year, and unless otherwise provided in the articles of incorporation or bylaws, the successors of the trustees, as their terms expire shall be elected by the grand lodge, assembly, conference, or other legislative or representative head, at its annual meeting.

After the two or more colleges or institutions of higher education under the patronage of any benevolent, religious, or fraternal organization or society, having a grand lodge, assembly, conference, or other legislative or representative head in the state have become consolidated, the board of trustees of the new corporation may be reduced in number after it has transacted the business of the corporation for a period of five years after the consolidation.

Unless other provision is made in the articles of incorporation the number of trustees shall be reduced by the grand lodge, assembly, conference, or other legislative or representative head of the colleges or institutions of higher education. At any annual session of the grand lodge, assembly, conference, or other legislative or representative head, there shall be dropped from the number of trustees to be elected at that session such a number of trustees as those present at the session determine, except that at no time shall the number of trustees composing the board be less than 15.

Provision may be made in the articles of incorporation, in addition to any other matters required by law, for the number of trustees, for the method of nominating and electing trustees, and special qualifications, if any, required of persons to be elected or of any particular number of such persons. If not made in the articles of incorporation, such methods and qualifications may be set forth in the bylaws.

Bylaws may be adopted and amended by the trustees except as otherwise provided in the articles or the bylaws. The bylaws may set forth the particular officers or persons in the grand lodge, conference, assembly, or other legislative or representative head entitled to vote as members of the corporation, and also the manner and method by which the voting is had. The bylaws may limit or restrict the power of the trustees to adopt, amend, or repeal bylaws. After the limitation or restriction is made it shall be complied with unless it is removed with the consent of the officers or persons entitled to vote as members. Where applicable the provisions of Articles 5 and 6 (commencing with Sections 5150 and 5160) of Chapter 2 of Part 2 of Division 2 of Title 1 of the Corporations Code apply to the bylaws.

Except as otherwise provided in Section 94406, in the articles of incorporation, or the bylaws, the board of trustees of the new corporation have all of the powers granted to boards of directors by and enumerated in Article 1 (commencing with Section 5210) of Chapter 2 of Part 2 of Division 2 of Title 1 of the Corporations Code.

The board of trustees of the new corporation shall report annually to the grand lodge, conference, assembly, or other legislative or representative head controlling it, the condition of affairs of the corporation, and the amount and manner of its receipts and expenditures.

The several boards of trustees of the consolidating institutions shall transfer all property, real and personal, held by them, to the new corporation, together with all powers, privileges, and authority conferred upon or enjoyed by them under their respective charters or acts of incorporation. The new corporation receiving the property shall assume all indebtedness and liabilities of the consolidating institutions, but shall not transfer the property from one location to another, except by an affirmative vote of not less than three-fourths of the board of trustees of the new corporation, nor divert specific grants, donations, or bequests from the purposes for which the grants, donations, or bequests were made. After the boards of trustees have conveyed the property, real and personal, of the various institutions to the new corporation, and the property has been accepted by the new corporation, the franchises held by the consolidating corporations shall cease, and the corporations are dissolved.