“Delaware has not provided a separate statute for non-stock corporations, but has instead dealt with such corporations within the ambit of the DGCL”.

In Hockessin Community Center, Inc. v. Swift, et. al., C.A. No. 7789-VCL, the Court of Chancery, in a post-trial opinion set forth a tutorial on proper governance under the Delaware General Corporation Law (“DGCL”) for non-stock corporations. 

This case was brought pursuant to 8 Del. C. § 225 to resolve a dispute over the proper governing body of  a non-stock corporation.  In its analysis of the dispute over the composition of the board, the Court specified that “Delaware has not provided a separate statute for non-stock corporations, but has instead dealt with such corporations within the ambit of the DGCL”.

The Court addressed in detail the governing provisions of the DGCL that relate, inter alia, to removal of  directors of non-stock corporations, identification of members of  non-stock corporations, the proper resignation of directors of non-stock corporations, filling of vacancies for directors of non-stock corporations, and the conferring of de facto status upon a director when corporate formalities are not followed in adding that director to the board. 

This case sets forth clear guideposts to the governing body of non-stock corporations, which if heeded, will protect them from running afoul of the not often articulated governance provisions in the DGCL relating to non-stock corporations.