Execution of Instruments for Non-Profit, Georgia

It appears that your President does not understand the fundamental concept of a corporation. A corporation is a huge personal liability shield against the world which does not break except in very limited circumstances (fraud, disregard of corporate formalities, personal guarantee, extremely bad behaviour, etc). When someone signs on behalf of the corporation (e.g. Mr. John Doe, for XYZ Corp), the signer is putting up a that big shield and the corporation is the party to the contract, not the signer. Absent those limited circumstances where that big shield can break, the main danger of personal liability comes from within the Corporation. The bylaws are there largely as a protection against enemies from within. If someone who is not authorized by the bylaws, board or members (if there are any) signs a contract, and the Corporation gets sued, the Corporation can sue the signer and to recover the funds it has lost and that signer will be personally liable to the Corporation. The Corporation can also say to the person suing the Corporation, "hey, you have no business believing that this person had the power to sign for the Corporation," and if true, the signer's shield just broke. Given the above, generally, any person can sign the lease so long as the board gives them the authority to. The board can hold a meeting and pass a resolution saying "XYZ Corp resolves that Mr. John Doe shall be authorized to sign ABC lease." This prevents the Corporation from later saying the signing was not authorized and getting Mr. Doe in trouble. In many bylaws, the President is given the authority to delegate his powers. If he wantes someone else to sign, he could write and sign something like "I hereby delegate my signing power to Mr. John Doe to sign XYZ lease." The problem, without the bylaws, is it is unknown whther your President has the authority to delegate his signing power. Thus, the board must be depended upon to authorize signing. The problem with board authorization without the bylaws is that the procedures for board action are now unknown. Is majority consent sufficient to authorize signing, or is unanimous consent required? The bylaws would have answered this question. The safest route would be the unanimous route, but since all this is to protect against ememies from within, it really is a matter of how much the signing director trusts the people on the board. That being said, operating without bylaws is a bad idea. If truly lost, the Board needs to get a new one drafted and adopted ASAP. If there are members, they may need to approve as well. A lawyer can advise on the process of adopting bylaws to replace the lost ones. If a lawyer drafted the old bylaws, he or she might still have a copy on file. The Secretary or another board member might have a copy on file as well. If the Corporation is a 501(c)(3), there should be a copy annexed to the form 1023 filing. The accountant could have a copy too. What your board needs to do is sit down with lawyer so that everyone is on the same page as to the potential for liabilities, and have the lawyer review the lease to make sure there are no surprises.

Ms. Hsui is correct. Someone else CAN, if authorized, sign the lease on behalf of, and in the name of, the corporation. I strongly recommend the organization consult with an attorney to have all of its questions answered, and get you onto the right track.

You should definitely take any and all paperwork for the organization to a lawyer for advice and counsel. It may be that the current president is confused about the difference between articles of incorporation and bylaws. It could be that bylaws were never drafted, which could be a very serious and fundamental oversight that would need to be remedied without delay. For purposes of the lease, I agree with my colleagues -- with proper, written authorization an officer or member of the board could sign the lease on behalf of the organization. A lawyer could assist you with drafting the appropriate resolutions to achieve that goal.