Tropical Isles Co-op, Inc. (Co-op) is a new corporation. It is not a continuation of Tropical Isles Homeowners Association, Inc. (TIHA) even though TIHA played a key role in the overall process of converting Tropical Isles to a resident owned community.

It is important that Co-op Members, particularly those who were previously TIHA Members, understand that there is no "carry-over" of TIHA Articles of Incorporation, By-Laws, term of office or anything else. This brief chapter will help Co-op Members understand some of the implications of the formation of a new corporation.

The Co-op was formed by the a group of individuals, the "incorporators". The Articles of Incorporation must list the initial Directors of the proposed corporation. The "incorporators" were named as the initial Directors of the Co-op. The Co-op had no Members at the time of its formation nor did it have any concrete way to identify exactly which residents would choose to become Members. Obviously then, there was no way to have the Membership elect Directors prior to the formation of the Co-op.

The Co-op Directors adopted the initial Corporate By-Laws. The Directors have the power to adopt and to amend By-Laws based upon their own action until such time as the initial Annual Meeting is held. Article III, Section 3.3 of the By-Laws states, "Annual Meeting. The annual Members meeting for the purpose of electing Directors and the transaction of any other authorized business shall be held at 7:00 p.m. on the fourth Monday in January of each year commencing in 2008, or at such other time as shall be selected by the Directors. At the annual meeting, the Members shall elect the Directors by a plurality vote (cumulative voting prohibited) and shall transact such other business as may be properly brought before the meeting." The power to amend the By-Laws remains with the Board of Directors until this initial Annual Meeting. After that, the By-Laws can be amended only by a vote of the Members.

The initial Board of Directors has tremendous power not only before the initial Annual Meeting but thereafter as well. The Articles of Incorporation state, "The Powers of this corporation shall be exercised, its properties controlled and its affairs conducted by a Board of Directors, consisting of not less than three (3) persons..."

Having read the above, you may well be thinking that the initial Board of Directors has all this power yet the Members have yet to vote on a single thing. Why is it this way?

There are a number of legal reasons but there is one over-riding reason: The Co-op has not yet completed the process of identifying and qualifying the entity that will cast the vote for each Co-op Share. Most Co-op Shares are owned jointly or in trusts. Yet the Share has but one vote. Which owner is going to cast the vote?

If you have closed on your Co-op parcel, you signed a Designated Voter Authorization Voting Certificate at that time. That document specifically identifies the person entitled to cast a vote for the parcel (unit) involved. However, there are still a few more closing to take place as this is being written.

There are a number of additional steps required leading up to the Annual Meeting. Legal counsel will guide us through the process to insure that Co-op adheres to the legally mandated process.