SECTIONS 7340-7341 - California Statutes

CORPORATIONS CODE

SECTION 7340-7341

7340. (a) A member may resign from membership at any time, although
the articles or bylaws may require reasonable notice before the
resignation is effective.
(b) This section shall not relieve the resigning member from any
obligation for charges incurred, services or benefits actually
rendered, dues, assessments or fees, or arising from contract, a
condition to ownership of land, an obligation arising out of the
ownership of land, or otherwise, and this section shall not diminish
any right of the corporation to enforce any such obligation or obtain
damages for its breach.
(c) A membership issued for a period of time shall expire when
such period of time has elapsed unless the membership is renewed.

7341. (a) No member may be expelled or suspended, and no membership
or memberships may be terminated or suspended, except according to
procedures satisfying the requirements of this section. An expulsion,
termination or suspension not in accord with this section shall be
void and without effect.
(b) Any expulsion, suspension, or termination must be done in good
faith and in a fair and reasonable manner. Any procedure which
conforms to the requirements of subdivision (c) is fair and
reasonable, but a court may also find other procedures to be fair and
reasonable when the full circumstances of the suspension,
termination, or expulsion are considered.
(c) A procedure is fair and reasonable when:
(1) The provisions of the procedure have been set forth in the
articles or bylaws, or copies of such provisions are sent annually to
all the members as required by the articles or bylaws;
(2) It provides the giving of 15 days' prior notice of the
expulsion, suspension or termination and the reasons therefor; and
(3) It provides 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 body
authorized to decide that the proposed expulsion, termination or
suspension not take place.
(d) Any notice required under this section may be given by any
method reasonably calculated to provide actual notice. Any notice
given by mail must be given by first-class or registered mail sent to
the last address of the members shown on the corporation's records.
(e) Any action challenging an expulsion, suspension or termination
of membership, including any claim alleging defective notice, must
be commenced within one year after the date of the expulsion,
suspension or termination. In the event such an action is successful
the court may order any relief, including reinstatement, it finds
equitable under the circumstances, but no vote of the members or of
the board may be set aside solely because a person was at the time of
the vote wrongfully excluded by virtue of the challenged expulsion,
suspension or termination, unless the court finds further that the
wrongful expulsion, suspension or termination was in bad faith and
for the purpose, and with the effect, of wrongfully excluding the
member from the vote or from the meeting at which the vote took
place, so as to affect the outcome of the vote.
(f) This section governs only the procedures for expulsion,
suspension or termination and not the substantive grounds therefor.
An expulsion, suspension or termination based upon substantive
grounds which violate contractual or other rights of the member or
are otherwise unlawful is not made valid by compliance with this
section.
(g) A member who is expelled or suspended or whose membership is
terminated shall be liable for any charges incurred, services or
benefits actually rendered, dues, assessments or fees incurred before
the expulsion, suspension or termination or arising from contract or
otherwise.