{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/15.2-5405.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/15.2-5405.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/15.2-5405.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/15.2-5405.html"}],"law_id":85800,"edition_id":1,"section_id":85800,"structure_id":14152,"section_number":"15.2-5405","catch_line":"Certificate of incorporation or charter; addition and withdrawal of members; board of directors; indemnification of directors, officers or employees","history":"1979, c. 416, \u00a7 15.1-1608; 1997, c. 587; 2006, cc. 929, 941.","full_text":"A\n\nAfter adoption or approval of the ordinances or agreement providing for the creation of an authority, the articles of incorporation of the authority shall be filed with the State Corporation Commission. If the State Corporation Commission finds that the articles of incorporation conform to law, and the creation of such an authority is in the public interest, a certificate of incorporation or charter shall forthwith be issued, and thereupon the authority shall constitute a political subdivision of the Commonwealth and a body politic and corporate and shall be deemed to have been lawfully and properly created, established and authorized to exercise the powers granted under this chapter.\n\t\t\tIn any suit, action or proceeding involving the validity or enforcement of, or relating to, any contract or action of the authority, the authority, in the absence of establishing fraud in the premises, shall be conclusively deemed to have been established in accordance with the provisions of this chapter upon proof of the issuance of the aforesaid certificate by the State Corporation Commission. A copy of such certificate, duly certified by the State Corporation Commission, shall be admissible in evidence in any such suit, action or proceeding, and shall be conclusive evidence of the filing and contents thereof.\n\t\t\tNotice of the issuance of such certificate by the State Corporation Commission shall be given to each of the member governmental units of the authority by the State Corporation Commission.B\n\nAfter the creation of an authority, any other governmental unit may become a member thereof upon application to such authority after the adoption of an ordinance by the governing body of the governmental unit authorizing such governmental unit to become a member of the authority, and with the unanimous consent of the members of the authority evidenced by ordinances of their respective governing bodies. Except for an authority created by a governmental unit exempt from the referendum requirement of § 15.2-5403, any governmental unit may withdraw from an authority; however, all contractual rights acquired and obligations incurred while a governmental unit was a member shall remain in full force and effect.\n\t\t\tIn the case of the joining of a new member governmental unit to an authority, or in the case of the withdrawal of an existing member governmental unit from an authority, the articles of incorporation of the authority shall be amended to evidence such joinder or withdrawal, as the case may be, and such amendment shall be filed with the State Corporation Commission. Thereupon, the State Corporation Commission shall issue a certificate of joinder or withdrawal, as the case may be, to which shall be attached a copy of the amendment to the articles of incorporation. The joining or withdrawal shall become effective upon the issuance of such certificate.C\n\nThe powers of each authority created by the governing body of a single governmental unit shall be exercised by a board of five directors, or, at the option of the governing body of the particular governmental unit, a number of directors equal to the number of persons on the governing body of the governmental unit. The powers of each authority created by the governing bodies of two or more governmental units shall be exercised by a board of such number of directors specified in its articles of incorporation, which shall be not less than one member for each governmental unit and not less than a total of five directors. The directors of an authority shall be selected in the manner and for the terms provided by the ordinance of a single governmental unit, or the concurrent ordinances or agreement of two or more of the governmental units creating the authority. No director shall be appointed for a term of more than four years but a director may be reappointed and succeed himself or herself. Directors shall hold office until their successors have been appointed. When one or more additional governmental units join an existing authority, each of such joining governmental units shall appoint not less than one director of the authority.\n\t\t\tThe directors of the authority shall elect one of their number chairman of the authority, and shall elect a secretary and treasurer and such other officers as are deemed necessary who need not be directors of the authority. The offices of secretary and treasurer may be combined. A majority of the directors of the authority shall constitute a quorum, and the vote of a majority of the directors shall be necessary for any action taken by the authority. No vacancy in the board of directors of the authority shall impair the right of a quorum to exercise all the rights and perform all the duties of the authority. If a vacancy occurs by reason of the death, disqualification or resignation of a director, the governing body of the governmental unit which appointed such director shall appoint a successor to fill his unexpired term. In the event of a vacancy in the board of directors for any reason, a successor shall be appointed within six months of the date on which such vacancy occurred.\n\t\t\tWhenever a governmental unit withdraws from an authority, the term of any director appointed to the board of directors from such governmental unit shall immediately terminate, and, if such termination results in less than five directors of the authority, additional directors shall be selected in the manner and for the terms provided by the ordinances or agreement creating the authority so as to comply with the requirements of this section. No elected official of a member governmental unit shall be a director of an authority. No person shall serve as a director unless he resides within the governmental unit which has appointed him. Directors shall receive such compensation as shall be fixed from time to time by resolution or resolutions of the governing body or bodies of the member governmental unit or units of the authority, and shall be reimbursed for any actual expenses necessarily incurred in the performance of their duties.D\n\nAn authority may defend, indemnify against loss or liability and save harmless any of its directors, officers or employees whenever a claim or demand is made or threatened, or whenever proceeded against in any investigation or before any court, board, commission or other public body to defend or maintain his official position or a position taken in the course of the execution of his duties or because of any act or omission arising out of the performance of his official duties if the director, officer or employee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the authority. If it is ultimately determined that a director, officer or employee of an authority is entitled to be indemnified by the authority as authorized in this section, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith. Expenses, including attorneys’ fees, incurred in defending a civil action, suit or proceeding may be paid by an authority in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in this section upon receipt of an undertaking by or on behalf of the director, officer or employee, to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the authority as authorized in this section.\n\t\t\tThe indemnification provided by this section shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer or employee, and shall inure to the benefit of the heirs, executors and administrators of such person. An authority shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the authority against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the authority would have the power to indemnify him against such liability under the provisions of this section.","order_by":null,"text":{"0":{"id":307265,"text":"After adoption or approval of the ordinances or agreement providing for the creation of an authority, the articles of incorporation of the authority shall be filed with the State Corporation Commission. If the State Corporation Commission finds that the articles of incorporation conform to law, and the creation of such an authority is in the public interest, a certificate of incorporation or charter shall forthwith be issued, and thereupon the authority shall constitute a political subdivision of the Commonwealth and a body politic and corporate and shall be deemed to have been lawfully and properly created, established and authorized to exercise the powers granted under this chapter.\n\t\t\tIn any suit, action or proceeding involving the validity or enforcement of, or relating to, any contract or action of the authority, the authority, in the absence of establishing fraud in the premises, shall be conclusively deemed to have been established in accordance with the provisions of this chapter upon proof of the issuance of the aforesaid certificate by the State Corporation Commission. A copy of such certificate, duly certified by the State Corporation Commission, shall be admissible in evidence in any such suit, action or proceeding, and shall be conclusive evidence of the filing and contents thereof.\n\t\t\tNotice of the issuance of such certificate by the State Corporation Commission shall be given to each of the member governmental units of the authority by the State Corporation Commission.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":307266,"text":"After the creation of an authority, any other governmental unit may become a member thereof upon application to such authority after the adoption of an ordinance by the governing body of the governmental unit authorizing such governmental unit to become a member of the authority, and with the unanimous consent of the members of the authority evidenced by ordinances of their respective governing bodies. Except for an authority created by a governmental unit exempt from the referendum requirement of § 15.2-5403, any governmental unit may withdraw from an authority; however, all contractual rights acquired and obligations incurred while a governmental unit was a member shall remain in full force and effect.\n\t\t\tIn the case of the joining of a new member governmental unit to an authority, or in the case of the withdrawal of an existing member governmental unit from an authority, the articles of incorporation of the authority shall be amended to evidence such joinder or withdrawal, as the case may be, and such amendment shall be filed with the State Corporation Commission. Thereupon, the State Corporation Commission shall issue a certificate of joinder or withdrawal, as the case may be, to which shall be attached a copy of the amendment to the articles of incorporation. The joining or withdrawal shall become effective upon the issuance of such certificate.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":307267,"text":"The powers of each authority created by the governing body of a single governmental unit shall be exercised by a board of five directors, or, at the option of the governing body of the particular governmental unit, a number of directors equal to the number of persons on the governing body of the governmental unit. The powers of each authority created by the governing bodies of two or more governmental units shall be exercised by a board of such number of directors specified in its articles of incorporation, which shall be not less than one member for each governmental unit and not less than a total of five directors. The directors of an authority shall be selected in the manner and for the terms provided by the ordinance of a single governmental unit, or the concurrent ordinances or agreement of two or more of the governmental units creating the authority. No director shall be appointed for a term of more than four years but a director may be reappointed and succeed himself or herself. Directors shall hold office until their successors have been appointed. When one or more additional governmental units join an existing authority, each of such joining governmental units shall appoint not less than one director of the authority.\n\t\t\tThe directors of the authority shall elect one of their number chairman of the authority, and shall elect a secretary and treasurer and such other officers as are deemed necessary who need not be directors of the authority. The offices of secretary and treasurer may be combined. A majority of the directors of the authority shall constitute a quorum, and the vote of a majority of the directors shall be necessary for any action taken by the authority. No vacancy in the board of directors of the authority shall impair the right of a quorum to exercise all the rights and perform all the duties of the authority. If a vacancy occurs by reason of the death, disqualification or resignation of a director, the governing body of the governmental unit which appointed such director shall appoint a successor to fill his unexpired term. In the event of a vacancy in the board of directors for any reason, a successor shall be appointed within six months of the date on which such vacancy occurred.\n\t\t\tWhenever a governmental unit withdraws from an authority, the term of any director appointed to the board of directors from such governmental unit shall immediately terminate, and, if such termination results in less than five directors of the authority, additional directors shall be selected in the manner and for the terms provided by the ordinances or agreement creating the authority so as to comply with the requirements of this section. No elected official of a member governmental unit shall be a director of an authority. No person shall serve as a director unless he resides within the governmental unit which has appointed him. Directors shall receive such compensation as shall be fixed from time to time by resolution or resolutions of the governing body or bodies of the member governmental unit or units of the authority, and shall be reimbursed for any actual expenses necessarily incurred in the performance of their duties.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":307268,"text":"An authority may defend, indemnify against loss or liability and save harmless any of its directors, officers or employees whenever a claim or demand is made or threatened, or whenever proceeded against in any investigation or before any court, board, commission or other public body to defend or maintain his official position or a position taken in the course of the execution of his duties or because of any act or omission arising out of the performance of his official duties if the director, officer or employee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the authority. If it is ultimately determined that a director, officer or employee of an authority is entitled to be indemnified by the authority as authorized in this section, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith. Expenses, including attorneys’ fees, incurred in defending a civil action, suit or proceeding may be paid by an authority in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in this section upon receipt of an undertaking by or on behalf of the director, officer or employee, to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the authority as authorized in this section.\n\t\t\tThe indemnification provided by this section shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer or employee, and shall inure to the benefit of the heirs, executors and administrators of such person. An authority shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the authority against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the authority would have the power to indemnify him against such liability under the provisions of this section.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C"}},"ancestry":[{"id":14152,"edition_id":1,"name":"Electric Authorities Act","identifier":"54","label":"chapter","depth":3,"order_by":1,"parent_id":12721,"metadata":{},"date_created":"2026-06-26 03:47:03","date_modified":"2026-06-26 03:47:03","permalink":{"id":159171,"object_type":"structure","relational_id":14152,"identifier":"54","token":"15.2\/IV\/54","url":"\/15.2\/IV\/54\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12721,"edition_id":1,"name":"Other Governmental Entities","identifier":"IV","label":"subtitle","depth":2,"order_by":1,"parent_id":12720,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":157897,"object_type":"structure","relational_id":12721,"identifier":"IV","token":"15.2\/IV","url":"\/15.2\/IV\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12720,"edition_id":1,"name":"Counties, Cities and Towns","identifier":"15.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":151279,"object_type":"structure","relational_id":12720,"identifier":"15.2","token":"15.2","url":"\/15.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":65196,"structure_id":14152,"section_number":"15.2-5400","catch_line":"Short title","url":"\/15.2-5400\/","token":"15.2\/IV\/54\/15.2-5400","metadata":false},{"id":86116,"structure_id":14152,"section_number":"15.2-5401","catch_line":"Intent of General Assembly","url":"\/15.2-5401\/","token":"15.2\/IV\/54\/15.2-5401","metadata":false},{"id":72529,"structure_id":14152,"section_number":"15.2-5402","catch_line":"Definitions","url":"\/15.2-5402\/","token":"15.2\/IV\/54\/15.2-5402","metadata":false},{"id":79988,"structure_id":14152,"section_number":"15.2-5403","catch_line":"Creation of electric authority; referendum","url":"\/15.2-5403\/","token":"15.2\/IV\/54\/15.2-5403","metadata":false},{"id":66895,"structure_id":14152,"section_number":"15.2-5404","catch_line":"Articles of incorporation","url":"\/15.2-5404\/","token":"15.2\/IV\/54\/15.2-5404","metadata":false},{"id":85800,"structure_id":14152,"section_number":"15.2-5405","catch_line":"Certificate of incorporation or charter; addition and withdrawal of members; board of directors; indemnification of directors, officers or employees","url":"\/15.2-5405\/","token":"15.2\/IV\/54\/15.2-5405","metadata":false},{"id":69588,"structure_id":14152,"section_number":"15.2-5405.1","catch_line":"Applicability of personnel and procurement procedures to certain authorities","url":"\/15.2-5405.1\/","token":"15.2\/IV\/54\/15.2-5405.1","metadata":false},{"id":84424,"structure_id":14152,"section_number":"15.2-5406","catch_line":"Rights, powers and duties of authority","url":"\/15.2-5406\/","token":"15.2\/IV\/54\/15.2-5406","metadata":false},{"id":72674,"structure_id":14152,"section_number":"15.2-5406.1","catch_line":"Retail distribution of electric energy limited to certain authorities","url":"\/15.2-5406.1\/","token":"15.2\/IV\/54\/15.2-5406.1","metadata":false},{"id":56253,"structure_id":14152,"section_number":"15.2-5406.2","catch_line":"Tort claims against certain authorities","url":"\/15.2-5406.2\/","token":"15.2\/IV\/54\/15.2-5406.2","metadata":false},{"id":64564,"structure_id":14152,"section_number":"15.2-5407","catch_line":"Membership in more than one authority","url":"\/15.2-5407\/","token":"15.2\/IV\/54\/15.2-5407","metadata":false},{"id":59051,"structure_id":14152,"section_number":"15.2-5408","catch_line":"Sale of power and energy, including capacity and output to member governmental units by authority; duration of contracts; source of payments; furnishing of money, property or services by member governmental units","url":"\/15.2-5408\/","token":"15.2\/IV\/54\/15.2-5408","metadata":false},{"id":70404,"structure_id":14152,"section_number":"15.2-5409","catch_line":"Sale of capacity and output to nonmembers; limitations","url":"\/15.2-5409\/","token":"15.2\/IV\/54\/15.2-5409","metadata":false},{"id":67460,"structure_id":14152,"section_number":"15.2-5410","catch_line":"Contents of agreement as to joint ownership of project; designation of party to agreement as agent for construction, operation and maintenance of project; powers and duties of agent","url":"\/15.2-5410\/","token":"15.2\/IV\/54\/15.2-5410","metadata":false},{"id":64546,"structure_id":14152,"section_number":"15.2-5411","catch_line":"Contracts for planning, acquisition, construction, etc., of projects","url":"\/15.2-5411\/","token":"15.2\/IV\/54\/15.2-5411","metadata":false},{"id":61540,"structure_id":14152,"section_number":"15.2-5412","catch_line":"Issuance of bonds by authority","url":"\/15.2-5412\/","token":"15.2\/IV\/54\/15.2-5412","metadata":false},{"id":67503,"structure_id":14152,"section_number":"15.2-5413","catch_line":"Interim receipts and temporary bonds; lost, stolen and destroyed bonds","url":"\/15.2-5413\/","token":"15.2\/IV\/54\/15.2-5413","metadata":false},{"id":55312,"structure_id":14152,"section_number":"15.2-5414","catch_line":"Bonds not debts of Commonwealth or member governmental unit","url":"\/15.2-5414\/","token":"15.2\/IV\/54\/15.2-5414","metadata":false},{"id":84956,"structure_id":14152,"section_number":"15.2-5415","catch_line":"Security for bonds; trust agreement; bond resolution","url":"\/15.2-5415\/","token":"15.2\/IV\/54\/15.2-5415","metadata":false},{"id":57033,"structure_id":14152,"section_number":"15.2-5416","catch_line":"Rents, rates, fees and other charges","url":"\/15.2-5416\/","token":"15.2\/IV\/54\/15.2-5416","metadata":false},{"id":82650,"structure_id":14152,"section_number":"15.2-5417","catch_line":"Moneys received deemed trust funds","url":"\/15.2-5417\/","token":"15.2\/IV\/54\/15.2-5417","metadata":false},{"id":82417,"structure_id":14152,"section_number":"15.2-5418","catch_line":"Bondholders' and trustees' remedies","url":"\/15.2-5418\/","token":"15.2\/IV\/54\/15.2-5418","metadata":false},{"id":69922,"structure_id":14152,"section_number":"15.2-5419","catch_line":"Refunding bonds","url":"\/15.2-5419\/","token":"15.2\/IV\/54\/15.2-5419","metadata":false},{"id":62550,"structure_id":14152,"section_number":"15.2-5420","catch_line":"Status of bonds under Uniform Commercial Code","url":"\/15.2-5420\/","token":"15.2\/IV\/54\/15.2-5420","metadata":false},{"id":78951,"structure_id":14152,"section_number":"15.2-5421","catch_line":"Bonds as legal investments and lawful security","url":"\/15.2-5421\/","token":"15.2\/IV\/54\/15.2-5421","metadata":false},{"id":59284,"structure_id":14152,"section_number":"15.2-5422","catch_line":"Bonds exempt from taxation","url":"\/15.2-5422\/","token":"15.2\/IV\/54\/15.2-5422","metadata":false},{"id":68719,"structure_id":14152,"section_number":"15.2-5423","catch_line":"Payments in lieu of property taxes; license tax","url":"\/15.2-5423\/","token":"15.2\/IV\/54\/15.2-5423","metadata":false},{"id":58684,"structure_id":14152,"section_number":"15.2-5423.1","catch_line":"Exemption from taxation for certain authorities","url":"\/15.2-5423.1\/","token":"15.2\/IV\/54\/15.2-5423.1","metadata":false},{"id":82928,"structure_id":14152,"section_number":"15.2-5424","catch_line":"Transfer, etc., of property of political subdivisions upon request of authority","url":"\/15.2-5424\/","token":"15.2\/IV\/54\/15.2-5424","metadata":false},{"id":81962,"structure_id":14152,"section_number":"15.2-5425","catch_line":"Eminent domain","url":"\/15.2-5425\/","token":"15.2\/IV\/54\/15.2-5425","metadata":false},{"id":57373,"structure_id":14152,"section_number":"15.2-5426","catch_line":"Annual reports","url":"\/15.2-5426\/","token":"15.2\/IV\/54\/15.2-5426","metadata":false},{"id":82182,"structure_id":14152,"section_number":"15.2-5427","catch_line":"Liability of members or officers","url":"\/15.2-5427\/","token":"15.2\/IV\/54\/15.2-5427","metadata":false},{"id":69086,"structure_id":14152,"section_number":"15.2-5428","catch_line":"Dissolution of authority","url":"\/15.2-5428\/","token":"15.2\/IV\/54\/15.2-5428","metadata":false},{"id":58789,"structure_id":14152,"section_number":"15.2-5429","catch_line":"Legislative consent to application of laws of other states","url":"\/15.2-5429\/","token":"15.2\/IV\/54\/15.2-5429","metadata":false},{"id":75194,"structure_id":14152,"section_number":"15.2-5430","catch_line":"Provisions of chapter cumulative; construction","url":"\/15.2-5430\/","token":"15.2\/IV\/54\/15.2-5430","metadata":false},{"id":81605,"structure_id":14152,"section_number":"15.2-5431","catch_line":"Provisions of chapter controlling over other statutes and charters","url":"\/15.2-5431\/","token":"15.2\/IV\/54\/15.2-5431","metadata":false}],"previous_section":{"id":66895,"structure_id":14152,"section_number":"15.2-5404","catch_line":"Articles of incorporation","url":"\/15.2-5404\/","token":"15.2\/IV\/54\/15.2-5404","metadata":false},"next_section":{"id":69588,"structure_id":14152,"section_number":"15.2-5405.1","catch_line":"Applicability of personnel and procurement procedures to certain authorities","url":"\/15.2-5405.1\/","token":"15.2\/IV\/54\/15.2-5405.1","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/15.2-5405\/","history_text":"

This law was first created in 1979. The record of its establishment is cataloged in chapter 416 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1979 \u201cActs\u201d aren\u2019t available online. It has been modified 2 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1997, chapter 587<\/a>; in 2006, chapters 929<\/a> and 941<\/a>.<\/p>","references":[{"id":79988,"section_number":"15.2-5403","catch_line":"Creation of electric authority; referendum","order_by":null,"url":"\/15.2-5403\/"}],"refers_to":[{"id":79988,"section_number":"15.2-5403","catch_line":"Creation of electric authority; referendum","order_by":null,"url":"\/15.2-5403\/"}],"permalink":{"id":159193,"object_type":"law","relational_id":85800,"identifier":"15.2-5405","token":"15.2\/IV\/54\/15.2-5405","url":"\/15.2-5405\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/15.2-5405\/","token":"15.2\/IV\/54\/15.2-5405","dublin_core":{"Title":"Certificate of incorporation or charter; addition and withdrawal of members; board of directors; indemnification of directors, officers or employees","Type":"Text","Format":"text\/html","Identifier":"\u00a7 15.2-5405","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> After adoption or approval of the ordinances<\/span> or agreement providing for the creation of an authority<\/span>, the articles of incorporation of the authority<\/span> shall be filed with the State Corporation Commission. If the State Corporation Commission finds that the articles of incorporation conform to law<\/span>, and the creation of such an authority<\/span> is in the public interest, a certificate of incorporation or charter shall forthwith be issued, and thereupon the authority<\/span> shall constitute a political subdivision of the Commonwealth and a body politic and corporate and shall be deemed to have been lawfully and properly created, established and authorized to exercise the powers granted under this chapter.\n\t\t\tIn any suit, action or proceeding involving the validity or enforcement of, or relating to, any contract<\/span> or action of the authority<\/span>, the authority<\/span>, in the absence of establishing fraud<\/span> in the premises, shall be conclusively deemed to have been established in accordance with the provisions of this chapter upon proof of the issuance of the aforesaid certificate by the State Corporation Commission. A copy of such certificate, duly certified by the State Corporation Commission, shall be admissible<\/span> in evidence<\/span> in any such suit, action or proceeding, and shall be conclusive evidence<\/span> of the filing and contents thereof.\n\t\t\tNotice of the issuance of such certificate by the State Corporation Commission shall be given to each of the member governmental units<\/span> of the authority<\/span> by the State Corporation Commission. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> After the creation of an authority<\/span>, any other governmental unit<\/span> may become a member thereof upon application to such authority<\/span> after the adoption of an ordinance<\/span> by the governing body<\/span> of the governmental unit<\/span> authorizing such governmental unit<\/span> to become a member of the authority<\/span>, and with the unanimous consent of the members of the authority<\/span> evidenced by ordinances<\/span> of their respective governing bodies. Except for an authority<\/span> created by a governmental unit<\/span> exempt from the referendum<\/span> requirement of § 15.2-5403<\/a>, any governmental unit<\/span> may withdraw from an authority<\/span>; however, all contractual rights acquired and obligations incurred while a governmental unit<\/span> was a member shall remain in full force and effect.\n\t\t\tIn the case of the joining of a new member governmental unit<\/span> to an authority<\/span>, or in the case of the withdrawal of an existing member governmental unit<\/span> from an authority<\/span>, the articles of incorporation of the authority<\/span> shall be amended to evidence<\/span> such joinder or withdrawal, as the case may be, and such amendment shall be filed with the State Corporation Commission. Thereupon, the State Corporation Commission shall issue<\/span> a certificate of joinder or withdrawal, as the case may be, to which shall be attached a copy of the amendment to the articles of incorporation. The joining or withdrawal shall become effective upon the issuance of such certificate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The powers of each authority<\/span> created by the governing body<\/span> of a single governmental unit<\/span> shall be exercised by a board of five directors, or, at the option of the governing body<\/span> of the particular governmental unit<\/span>, a number of directors equal to the number of persons on the governing body<\/span> of the governmental unit<\/span>. The powers of each authority<\/span> created by the governing bodies of two or more governmental units<\/span> shall be exercised by a board of such number of directors specified in its articles of incorporation, which shall be not less than one member for each governmental unit<\/span> and not less than a total of five directors. The directors of an authority<\/span> shall be selected in the manner and for the terms provided by the ordinance<\/span> of a single governmental unit<\/span>, or the concurrent ordinances<\/span> or agreement of two or more of the governmental units<\/span> creating the authority<\/span>. No director shall be appointed for a term of more than four years but a director may be reappointed and succeed himself or herself. Directors shall hold office until their successors have been appointed. When one or more additional governmental units<\/span> join an existing authority<\/span>, each of such joining governmental units<\/span> shall appoint not less than one director of the authority<\/span>.\n\t\t\tThe directors of the authority<\/span> shall elect one of their number chairman of the authority<\/span>, and shall elect a secretary and treasurer and such other officers as are deemed necessary who need not be directors of the authority<\/span>. The offices of secretary and treasurer may be combined. A majority of the directors of the authority<\/span> shall constitute a quorum, and the vote of a majority of the directors shall be necessary for any action taken by the authority<\/span>. No vacancy in the board of directors of the authority<\/span> shall impair the right of a quorum to exercise all the rights and perform all the duties of the authority<\/span>. If a vacancy occurs by reason of the death, disqualification or resignation of a director, the governing body<\/span> of the governmental unit<\/span> which appointed such director shall appoint a successor to fill his unexpired term. In the event of a vacancy in the board of directors for any reason, a successor shall be appointed within six months of the date on which such vacancy occurred.\n\t\t\tWhenever a governmental unit<\/span> withdraws from an authority<\/span>, the term of any director appointed to the board of directors from such governmental unit<\/span> shall immediately terminate, and, if such termination results in less than five directors of the authority<\/span>, additional directors shall be selected in the manner and for the terms provided by the ordinances<\/span> or agreement creating the authority<\/span> so as to comply with the requirements of this section. No elected official of a member governmental unit<\/span> shall be a director of an authority<\/span>. No person shall serve as a director unless he resides within the governmental unit<\/span> which has appointed him. Directors shall receive such compensation as shall be fixed from time to time by resolution or resolutions of the governing body<\/span> or bodies of the member governmental unit<\/span> or units of the authority<\/span>, and shall be reimbursed for any actual expenses necessarily incurred in the performance of their duties. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> An authority<\/span> may defend, indemnify against loss or liability and save harmless any of its directors, officers or employees whenever a claim or demand is made or threatened, or whenever proceeded against in any investigation or before any court<\/span>, board, commission or other public body to defend or maintain his official position or a position taken in the course of the execution of his duties or because of any act or omission arising out of the performance of his official duties if the director, officer or employee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the authority<\/span>. If it is ultimately determined that a director, officer or employee of an authority<\/span> is entitled to be indemnified by the authority<\/span> as authorized in this section, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith. Expenses, including attorneys’ fees, incurred in defending a civil action<\/span>, suit or proceeding may be paid by an authority<\/span> in advance of the final disposition<\/span> of such action, suit or proceeding as authorized in the manner provided in this section upon receipt of an undertaking by or on behalf of the director, officer or employee, to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the authority<\/span> as authorized in this section.\n\t\t\tThe indemnification provided by this section shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer or employee, and shall inure to the benefit of the heirs, executors and administrators of such person. An authority<\/span> shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the authority<\/span> against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the authority<\/span> would have the power to indemnify him against such liability under the provisions of this section. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCERTIFICATE OF INCORPORATION OR CHARTER; ADDITION AND WITHDRAWAL OF MEMBERS;\nBOARD OF DIRECTORS; INDEMNIFICATION OF DIRECTORS, OFFICERS OR EMPLOYEES (\u00a7\n15.2-5405)\n\nA. After adoption or approval of the ordinances or agreement providing for the\ncreation of an authority, the articles of incorporation of the authority shall\nbe filed with the State Corporation Commission. If the State Corporation\nCommission finds that the articles of incorporation conform to law, and the\ncreation of such an authority is in the public interest, a certificate of\nincorporation or charter shall forthwith be issued, and thereupon the authority\nshall constitute a political subdivision of the Commonwealth and a body politic\nand corporate and shall be deemed to have been lawfully and properly created,\nestablished and authorized to exercise the powers granted under this chapter.\n\t\t\tIn any suit, action or proceeding involving the validity or enforcement of,\nor relating to, any contract or action of the authority, the authority, in the\nabsence of establishing fraud in the premises, shall be conclusively deemed to\nhave been established in accordance with the provisions of this chapter upon\nproof of the issuance of the aforesaid certificate by the State Corporation\nCommission. A copy of such certificate, duly certified by the State Corporation\nCommission, shall be admissible in evidence in any such suit, action or\nproceeding, and shall be conclusive evidence of the filing and contents thereof.\n\t\t\tNotice of the issuance of such certificate by the State Corporation\nCommission shall be given to each of the member governmental units of the\nauthority by the State Corporation Commission.\n\nB. After the creation of an authority, any other governmental unit may become a\nmember thereof upon application to such authority after the adoption of an\nordinance by the governing body of the governmental unit authorizing such\ngovernmental unit to become a member of the authority, and with the unanimous\nconsent of the members of the authority evidenced by ordinances of their\nrespective governing bodies. Except for an authority created by a governmental\nunit exempt from the referendum requirement of § 15.2-5403, any\ngovernmental unit may withdraw from an authority; however, all contractual\nrights acquired and obligations incurred while a governmental unit was a member\nshall remain in full force and effect.\n\t\t\tIn the case of the joining of a new member governmental unit to an authority,\nor in the case of the withdrawal of an existing member governmental unit from an\nauthority, the articles of incorporation of the authority shall be amended to\nevidence such joinder or withdrawal, as the case may be, and such amendment\nshall be filed with the State Corporation Commission. Thereupon, the State\nCorporation Commission shall issue a certificate of joinder or withdrawal, as\nthe case may be, to which shall be attached a copy of the amendment to the\narticles of incorporation. The joining or withdrawal shall become effective upon\nthe issuance of such certificate.\n\nC. The powers of each authority created by the governing body of a single\ngovernmental unit shall be exercised by a board of five directors, or, at the\noption of the governing body of the particular governmental unit, a number of\ndirectors equal to the number of persons on the governing body of the\ngovernmental unit. The powers of each authority created by the governing bodies\nof two or more governmental units shall be exercised by a board of such number\nof directors specified in its articles of incorporation, which shall be not less\nthan one member for each governmental unit and not less than a total of five\ndirectors. The directors of an authority shall be selected in the manner and for\nthe terms provided by the ordinance of a single governmental unit, or the\nconcurrent ordinances or agreement of two or more of the governmental units\ncreating the authority. No director shall be appointed for a term of more than\nfour years but a director may be reappointed and succeed himself or herself.\nDirectors shall hold office until their successors have been appointed. When one\nor more additional governmental units join an existing authority, each of such\njoining governmental units shall appoint not less than one director of the\nauthority.\n\t\t\tThe directors of the authority shall elect one of their number chairman of\nthe authority, and shall elect a secretary and treasurer and such other officers\nas are deemed necessary who need not be directors of the authority. The offices\nof secretary and treasurer may be combined. A majority of the directors of the\nauthority shall constitute a quorum, and the vote of a majority of the directors\nshall be necessary for any action taken by the authority. No vacancy in the\nboard of directors of the authority shall impair the right of a quorum to\nexercise all the rights and perform all the duties of the authority. If a\nvacancy occurs by reason of the death, disqualification or resignation of a\ndirector, the governing body of the governmental unit which appointed such\ndirector shall appoint a successor to fill his unexpired term. In the event of a\nvacancy in the board of directors for any reason, a successor shall be appointed\nwithin six months of the date on which such vacancy occurred.\n\t\t\tWhenever a governmental unit withdraws from an authority, the term of any\ndirector appointed to the board of directors from such governmental unit shall\nimmediately terminate, and, if such termination results in less than five\ndirectors of the authority, additional directors shall be selected in the manner\nand for the terms provided by the ordinances or agreement creating the authority\nso as to comply with the requirements of this section. No elected official of a\nmember governmental unit shall be a director of an authority. No person shall\nserve as a director unless he resides within the governmental unit which has\nappointed him. Directors shall receive such compensation as shall be fixed from\ntime to time by resolution or resolutions of the governing body or bodies of the\nmember governmental unit or units of the authority, and shall be reimbursed for\nany actual expenses necessarily incurred in the performance of their duties.\n\nD. An authority may defend, indemnify against loss or liability and save\nharmless any of its directors, officers or employees whenever a claim or demand\nis made or threatened, or whenever proceeded against in any investigation or\nbefore any court, board, commission or other public body to defend or maintain\nhis official position or a position taken in the course of the execution of his\nduties or because of any act or omission arising out of the performance of his\nofficial duties if the director, officer or employee acted in good faith and in\na manner he reasonably believed to be in, or not opposed to, the best interests\nof the authority. If it is ultimately determined that a director, officer or\nemployee of an authority is entitled to be indemnified by the authority as\nauthorized in this section, he shall be indemnified against expenses, including\nattorneys’ fees, actually and reasonably incurred by him in connection\ntherewith. Expenses, including attorneys’ fees, incurred in defending a\ncivil action, suit or proceeding may be paid by an authority in advance of the\nfinal disposition of such action, suit or proceeding as authorized in the manner\nprovided in this section upon receipt of an undertaking by or on behalf of the\ndirector, officer or employee, to repay such amount unless it shall ultimately\nbe determined that he is entitled to be indemnified by the authority as\nauthorized in this section.\n\t\t\tThe indemnification provided by this section shall not be deemed exclusive of\nany other rights to which those indemnified may be entitled under any bylaw,\nagreement, or otherwise, both as to action in his official capacity and as to\naction in another capacity while holding such office, and shall continue as to a\nperson who has ceased to be a director, officer or employee, and shall inure to\nthe benefit of the heirs, executors and administrators of such person. An\nauthority shall have power to purchase and maintain insurance on behalf of any\nperson who is or was a director, officer or employee of the authority against\nany liability asserted against him and incurred by him in any such capacity or\narising out of his status as such, whether or not the authority would have the\npower to indemnify him against such liability under the provisions of this\nsection.\n\nHISTORY: 1979, c. 416, \u00a7 15.1-1608; 1997, c. 587; 2006, cc. 929, 941.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}