Title 15: Corporations and Associations Not for Profit

Section 1: Legal Paraphrase

Title 15 of the New Jersey Revised Statutes is the State's original general act for organizations formed for charitable, educational, religious, social, or other non-business purposes. Descended from L. 1898, c. 181, "An Act to incorporate associations not for pecuniary profit," it supplied the framework for forming, governing, and dissolving nonprofit corporations and unincorporated associations, including provisions on trustees and bylaws, amendment of certificates of incorporation, and the capacity of such entities to "sue and be sued" in court. The New Jersey Nonprofit Corporation Act, N.J.S.A. 15A:1-1 et seq. (L. 1983, c. 127), now governs most nonprofit corporations, which may reincorporate or become subject to that title. Title 15 nevertheless remains significant for unincorporated associations, special-purpose entities such as boards of trade and volunteer fire companies, and the vested rights of corporations organized under the older act.

Section 2: ELI-10 Explanation

When people get together to do something good — start a food pantry, a church choir, or a soccer club — the group needs a rulebook so it can act like one team: own a clubhouse, pick leaders, and stand up for itself. Title 15 is New Jersey's old rulebook for these clubs. It explains how to officially start a club (fill out the right papers), how members choose their leaders (trustees) and make rules (bylaws), how the club may own property and go to court when someone hurts it, and how to close the club and give away what is left. Later, New Jersey wrote a newer rulebook, Title 15A, that most new clubs now use. But Title 15 still matters for older clubs and for informal groups that never filed papers — like a neighborhood committee — are still treated as one team under this rulebook.

Section 3: General Application & Case Example 1

How It Is Applied

Title 15 governs nonprofit corporations and unincorporated associations — churches, charities, clubs, fraternal societies, and similar groups organized for purposes other than making money for their members. For these entities it historically performed the role that Title 14A performs for business corporations: prescribing the certificate of incorporation, the election and powers of trustees, bylaws adopted by the members, amendment of the corporate charter, and dissolution with disposition of assets. Because a nonprofit corporation's powers derive from its articles and "the law under which the corporation came into being," courts measure the actions of older entities by the standards of Title 15 even today. In practice, the Title is invoked in disputes over control of corporate property, charter amendments, membership and trustee elections, and distribution of assets on dissolution, and it is read together with later statutes — chiefly Title 15A, which new corporations follow, and Titles 16 and 2A, which address religious corporations and unincorporated associations. Its mechanisms are procedural and structural: filing requirements, member votes, trustee action, and court review of whether those steps were followed.

Case Example

• Case Name & Citation: Bible Presbyterian Church of Collingswood v. Harvey Cedars Bible Conference, Inc., 84 N.J. Super. 441 (App. Div. 1964)
• Statute Applied: N.J.S.A. 15:1-1 et seq. (incorporation and governance of nonprofit associations); N.J.S.A. 15:1-14 (amendment of certificate of incorporation)
• Brief Summary: Defendant Harvey Cedars Bible Conference, Inc. was incorporated in 1941 as a non-profit corporation under R.S. 15:1-1 et seq. On May 26, 1961, its trustees filed a certificate of change — amended pursuant to R.S. 15:1-14 and 15:1-14.1 — that altered the corporate name and broadened the stated purposes, including removal of supervision by the Bible Presbyterian denomination. Plaintiff incorporators and trustees sued, alleging a diversion of church property contrary to R.S. 16:1-25 of the General Religious Societies Act. The Appellate Division held that because the conference incorporated under the nonprofit act rather than the religious societies act, the board's actions were measured by the standards of R.S. 15:1-1 et seq.; N.J.S.A. 15:1-14 expressly permits a Title 15 corporation, by proper action of its members, to alter its stated purposes, so R.S. 16:1-25 did not apply. The court further found no evidence that the corporation's religious and charitable purposes had actually been diverted.
• Source Link: https://scholar.google.com/scholar_case?case=9571550951479573820

Section 4: ELI-10 Application & Case Example 2

Real World Example (Explained Simply)

Imagine a big apartment building where each family owns its own apartment, but the yard, hallways, and roof belong to everyone together. The families form a "homeowners' club" — officially a nonprofit corporation — to take care of the shared parts and collect dues. Now imagine the builder who made the building leaves big cracks in the shared roof and refuses to fix them. One family alone might be too scared or too small to fight the builder. But the club can go to court for the whole building: under Title 15, the club is treated like a real "person" in court — it can sue and be sued, complain and defend, just like an adult. So one lawsuit by the club protects every family at once, instead of a hundred separate fights. That is the "sue and be sued" power that Title 15 gives to nonprofit clubs.

Case Example

• Case Name & Citation: Siller v. Hartz Mountain Associates, 93 N.J. 370 (1983)
• Statute Applied: N.J.S.A. 15:1-4(b) (capacity of nonprofit corporations to sue and be sued)
• Brief Summary: Unit owners in the Harmon Cove condominium development sued the developer, Hartz Mountain Associates, and the condominium associations — nonprofit corporations that managed the common property — challenging, among other things, a settlement the associations had reached with the developer. The Supreme Court confirmed the associations' capacity to act in court for the community: because the Association was a nonprofit corporation, it could, under the terms of N.J.S.A. 15:1-4(b), "sue and be sued, complain and defend in any court," and the Court endorsed the policy, drawn from Crescent Park Tenants Ass'n v. Realty Equities Corp. of N.Y., 58 N.J. 98 (1971), that common grievances are appropriately litigated in a proceeding between the association and the landlord rather than in burdensome multi-party litigation. The Court affirmed in part and reversed in part, holding that the associations could not preclude individual owners from pursuing their own unit-specific claims.
• Source Link: https://scholar.google.com/scholar_case?case=4662200766336644583