Simone Lawson
The bylaws of a non-profit organization are its operating manual and a legally binding document that outlines the rules and procedures for its governance. They are similar to the US Constitution in that they deal with the highest level of governing issues, such as organizational purpose, board structure, officer positions, and voting rights. While some organizations have only a constitution or bylaws, others have both. In the case of the latter, the constitution ranks higher and is a higher authority than the bylaws, which must comply with and cannot contradict it. The constitution typically contains the most basic rules and structure of the organization and is deliberately made difficult to change. Bylaws, on the other hand, are more flexible and can be revised as needed to reflect changing realities, expectations, and goals. They are created by the board when establishing the organization and can be customized to fit the non-profit's needs.
| Characteristics | Values |
|---|---|
| Level of authority | The constitution ranks higher than bylaws and is a higher authority. |
| Purpose | The constitution describes the purpose of the non-profit, while bylaws are the rules for its governance. |
| Detail | The constitution contains the most basic rules and structure of the organization, while bylaws outline the specific provisions. |
| Flexibility | Constitutions are not meant to be changed often, while bylaws can be revised as needed. |
| Difficulty to change | Constitutions are deliberately made difficult to change, requiring greater-than-normal notice requirements and a higher vote threshold. |
| Legal requirements | Bylaws are legally binding and are a requirement for incorporation. |
| Membership | Bylaws can include criteria for membership eligibility, dues, rights, and termination of membership. |
| Meetings | Bylaws can include rules for official meetings, special meetings, and meeting notices. |
| Voting rights | Bylaws can outline voting rights. |
| Board structure | Bylaws can include rules for board succession and removal. |
| Dispute resolution | Bylaws can be used in dispute resolution and court cases to show company policy. |
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What You'll Learn
- Non-profit bylaws are legally binding and a requirement for incorporation
- Bylaws are the rules for a non-profit's governance, while the constitution outlines its purpose
- Bylaws are a non-profit's operating manual, outlining how a company operates daily
- Bylaws can be used to resolve disputes and sue for misconduct by directors, officers or staff
- Bylaws should be reviewed annually by board members to prevent costly errors
Non-profit bylaws are legally binding and a requirement for incorporation
Non-profit bylaws are a legally binding document that outlines the rules and procedures for a non-profit organisation's board of directors. They are a requirement for incorporation and serve as the governing document, providing a framework for the board's actions and decisions. While the specific language used in the bylaws is not dictated, they must comply with federal and state laws and complement the organisation's articles of incorporation.
The bylaws cover a range of topics, including organisational purpose, board structure, officer positions, terms of service, succession and removal, meeting requirements, membership provisions, voting rights, and conflict-of-interest policies. They are designed to provide clarity and eliminate guesswork, ensuring the smooth operation of the non-profit.
It is important to note that bylaws are legally binding on the corporation. Failure to comply with the bylaws can result in organisational conflict, personal liability, loss of tax-exempt status, and even lawsuits. Therefore, board members must understand the provisions and be accountable for following them.
When drafting bylaws, it is recommended to consult a qualified professional experienced in non-profit matters, such as an attorney or a professional services firm. This ensures compliance with state laws and regulations and helps to avoid potential legal issues down the road. Additionally, it is crucial to review and update the bylaws regularly to reflect the changing needs of the organisation.
In summary, non-profit bylaws are legally binding documents that are essential for the incorporation and effective governance of a non-profit organisation. They provide a framework for the board's decisions and actions, ensuring clarity and compliance with legal requirements. By drafting, understanding, and adhering to comprehensive bylaws, non-profit organisations can minimise legal risks and promote smooth operations.
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Bylaws are the rules for a non-profit's governance, while the constitution outlines its purpose
Non-profit bylaws are a set of rules that dictate how an organization is governed. They are the main governing document for a non-profit organization and are considered a legal document. Bylaws are typically adopted by the board of directors during the initial stages of forming the non-profit and can be amended as needed. They provide a framework for how the organization is structured and how it functions.
The bylaws of a non-profit organization should include only fundamental rules governing the non-profit. Information that changes frequently, such as staff job descriptions, fundraising or marketing guidelines, and charters, should not be included in the bylaws. Instead, they should be included in procedure or policy manuals. Bylaws should be treated as a policy and procedure manual, and they should be kept relevant and up-to-date.
The constitution of a non-profit organization, on the other hand, outlines the purpose of the organization. It lists the name and purpose(s) of the non-profit, while everything else is included in the bylaws. The only exception is that if a non-profit wishes to be a Member-Funded Society, a clause needs to appear in its constitution.
The constitution and bylaws are two separate documents, but they work together to provide a framework for the governance and operation of a non-profit organization. The constitution sets out the purpose and vision of the non-profit, while the bylaws outline the rules and procedures that will govern the organization's activities.
It is important to note that bylaws are legally binding and are a requirement for incorporation. They are the main official documents of an organization and guide how the non-profit runs. They include rules about important matters such as how to become a member, conducting meetings, and elections.
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Bylaws are a non-profit's operating manual, outlining how a company operates daily
Non-profit bylaws are a set of rules that outline how an organisation operates and are legally binding. They are a requirement for incorporation and dictate how the organisation is governed. Bylaws are created by the board when the organisation is established and are considered the main governing document for a non-profit. They are legally binding and are often compared to the US Constitution.
The bylaws should include fundamental rules and governing issues such as the organisational purpose, board structure, officer positions, terms of service, succession and removal, official meeting requirements, membership provisions, voting rights and conflict-of-interest policies. They should also outline rules for authority levels, rights and expectations, helping to prevent and resolve conflicts.
While the IRS does not require specific language in the bylaws of exempt organisations, many state laws dictate that tax-exempt organisations must have a clear operating procedure, which is often outlined in the bylaws. It is important to ensure that bylaws remain compliant with state laws and regulations. Bylaws should be reviewed regularly and amended as necessary to reflect the evolving nature of the organisation.
Non-profits can use model bylaws as a template and customise them to fit their specific needs. It is recommended to seek assistance from a qualified professional experienced in non-profit matters when drafting or amending bylaws.
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Bylaws can be used to resolve disputes and sue for misconduct by directors, officers or staff
Non-profit organisations are required to have two documents: a constitution and bylaws. The constitution outlines the name and purpose(s) of the non-profit, while the bylaws are the legally binding governing document that dictates how the organisation and its board of directors must be run.
Bylaws are a big deal and should be taken seriously. They are a legal document, and while policies and codes of conduct are important for risk management and consistency, they do not carry the same weight as bylaws.
For example, bylaws can include rules about how to become a member, conducting meetings, and elections. They can also outline the organisational purpose, board structure, officer position descriptions and responsibilities, terms of board service, officer/board member succession and removal, official meeting requirements, membership provisions, voting rights, and conflict-of-interest policies.
If there is a violation of the bylaws, there can be consequences for the violating party, including being sued via a lawsuit. While many disputes are handled outside of the courtroom, some do lead to litigation. Consequences for violating bylaws can include removal from office, internal liability (disciplinary action or fines), external liability (if the violation caused harm to a third party), dissolution of the corporation, or criminal liability.
It is important to note that not all attorneys are familiar with non-profit issues, so it is crucial to seek assistance from an expert experienced in non-profit matters when drafting or amending bylaws.
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Bylaws should be reviewed annually by board members to prevent costly errors
Non-profit bylaws are a legal document that dictates how the organization must be governed. They are the main governing document for a non-profit organization, outlining the rules and procedures for its operations. Bylaws are legally binding and are a requirement for incorporation. They are often compared to the US Constitution, dealing with the highest level of governing issues, such as organizational purpose, board structure, officer positions, and responsibilities.
While the specific requirements may vary depending on the state and type of non-profit, there are several key reasons why bylaws should be reviewed annually by board members:
Preventing Costly Errors
Reviewing bylaws annually helps board members prevent costly errors. It ensures that the organization's operations remain compliant with the law and reduces the risk of litigation. Outdated bylaws that are not revised can lead to violations and legal consequences. For example, a board member who fails to follow state law requirements due to outdated bylaws may face criminal charges.
Maintaining Compliance
Non-profit bylaws must comply with state laws and regulations. By reviewing the bylaws annually, board members can ensure that any changes in state laws or internal policies are promptly reflected in the bylaws. This helps the organization maintain compliance and avoid legal issues.
Effective Governance
Regular bylaw reviews provide a necessary structure for effective governance. They eliminate guesswork and inconsistency in decision-making, ensuring that board members are aware of their responsibilities and how to fulfill them. This promotes transparency and accountability in the organization's operations.
Adaptability and Relevance
Annual reviews allow board members to assess the relevance and adaptability of the bylaws. Over time, the organization's needs may change, and certain procedures may become outdated. By periodically reviewing the bylaws, board members can identify areas that require amendment to align with the organization's current structure and functions.
Consistency and Standardization
Bylaws should provide consistency and standardization across the organization. By reviewing them annually, board members can ensure that all committees, subsidiaries, and entities within the organization operate under the same rules and guidelines. This promotes clarity in relative duties, accountabilities, and decision-making processes.
In conclusion, annual bylaw reviews by board members are crucial to preventing costly errors, maintaining legal compliance, promoting effective governance, ensuring adaptability, and establishing consistency within a non-profit organization.
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Frequently asked questions
The constitution is a higher authority than the bylaws, which must comply with and cannot contradict it. The constitution contains the most basic rules and structure of the organization, and it is not meant to be changed often. The bylaws, on the other hand, are the rules by which the non-profit operates and can be revised as needed.
Bylaws can include a variety of topics, such as how directors are elected, the role of each director, accounting and finance procedures, dissolution clauses, and rules governing the transfer of shares and ownership. They can also cover meeting frequency, how to handle special meetings, and the minimum number of board members required for official decisions (known as a quorum).
Yes, bylaws are legally binding and are a requirement for incorporation. They are the governing document for the non-profit and its board of directors.
Yes, an organization can have just bylaws, just a constitution, or both. If an organization has both, the constitution takes precedence and the bylaws must comply with it.
