Simone Lawson
Whether an organization should have a constitution, bylaws, or both is a question that often arises. Constitutions and bylaws are both governing documents or “documents of authority” that outline the rules and structure of an organization. While a constitution is a brief document containing the fundamental framework of an organization, bylaws are more detailed and contain operational rules such as election procedures, committee terms, and member discipline. Bylaws should be regularly amended to remain relevant, while constitutions are intentionally made difficult to change.
| Characteristics | Values |
|---|---|
| Purpose | Bylaws are the governing regulations of a corporation or society's internal affairs. |
| Content | Bylaws contain detailed, operational rules such as election rules, committee terms of reference, member discipline, and duties of officers. |
| Amendments | Bylaws should be amended every five to ten years as needed. |
| Difficulty of Amendments | Bylaws should be marginally more difficult to amend than a constitution. |
| Importance | US courts take bylaws very seriously. |
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What You'll Learn
- Bylaws are defined as the governing regulations of a corporation or society's internal affairs
- Constitutions contain the most basic rules and structure of an organisation, and are deliberately made difficult to change
- Bylaws should be amended every five to ten years, whereas a constitution should only be amended if absolutely necessary
- Corporations usually only have bylaws, which would rank lower than the articles of incorporation
- Bylaws are taken seriously in US courts, with at least two cases coming down to what the bylaws said
Bylaws are defined as the governing regulations of a corporation or society's internal affairs
Bylaws are a set of rules that govern the internal management of a corporation, organisation, or community. They are established by the board of directors, who have broad discretion in deciding what the bylaws should provide. However, there are two important restrictions: bylaws cannot conflict with the provisions in the articles of incorporation, and they must not violate the law.
Bylaws are not the same as Articles of Incorporation, but they are similar in that they form the legal foundation of a business and guide its operations. While there is no requirement for a corporation to file its bylaws with the state, most state laws require that corporations establish company bylaws. Bylaws are important for clarifying the roles of shareholders, directors, and officers, and for creating an internal structure to guide the business.
The bylaws of a company are typically set out in a formal written document. They cover areas such as internal management, decision-making procedures, and voting. Bylaws may also be used to vary certain statutory default provisions. For example, a company's bylaws might include regulations regarding taxes, permits, and licenses.
Some publicly traded companies, such as Apple and Nike, make their bylaws publicly available. This can be helpful for understanding how bylaws work and what they might include. When forming a corporation, it is important to establish clear bylaws to provide a solid foundation for the company's operations and internal governance.
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Constitutions contain the most basic rules and structure of an organisation, and are deliberately made difficult to change
Constitutions are deliberately made difficult to change because they contain the fundamental rules and principles that govern a state or an organisation. The constitution is the highest law of the land and serves as the foundation for all other laws and regulations. Amending a constitution typically requires a high threshold of consensus, such as a supermajority vote in a legislature or a referendum. This is to ensure that any changes to the fundamental rules of a country or an organisation are carefully considered and have broad support.
For example, in the United States, there are two pathways to amending the Constitution. The first is through Congress, which requires a two-thirds majority in both the House of Representatives and the Senate. The second is through the states, where two-thirds of state legislatures (currently 34) must call for a national convention to propose amendments. Even then, amendments must be ratified by three-quarters of the states to become part of the Constitution.
The difficult process of amending a constitution is meant to protect the stability and continuity of a government or an organisation. It ensures that the core principles and rules are not easily changed by temporary shifts in political power or popular sentiment. This safeguard preserves the integrity of the constitution and prevents impulsive or partisan changes that could undermine the fundamental values and principles it enshrines.
However, the challenge of amending a constitution can also pose problems in certain circumstances. For instance, when a constitution is outdated or contains provisions that are no longer suitable for a country's current situation, the high bar for change can hinder necessary reforms. In such cases, countries may opt for a constitutional convention, a process specifically designed to propose and consider amendments to the constitution.
While constitutions are meant to be difficult to change, it is not impossible. Amending a constitution requires a careful and deliberate process that encourages broad consensus and protects the core values and principles of a nation or an organisation. This balance between stability and adaptability ensures that constitutions can endure while also evolving to meet the needs of the people they govern.
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Bylaws should be amended every five to ten years, whereas a constitution should only be amended if absolutely necessary
Bylaws and constitutions are both "governing documents" or "documents of authority". They outline the rules and structure of an organisation, but the specific content of each document can vary between organisations. Bylaws are defined as the governing regulations of a corporation's or society's internal affairs. They are more detailed and operational than a constitution, covering election rules, committee terms of reference, member discipline, and duties of officers. They may also include administrative and "process-focused" rules, such as employee vacation rules and the organisation's anti-smoking policy.
While bylaws should be amended regularly to stay relevant and reflect changing times and circumstances, a constitution is a foundational document that should only be amended if absolutely necessary. Bylaws should be amended every five to ten years as needed. This is because bylaws are typically easier to change than a constitution, which often requires greater-than-normal notice requirements and a higher vote threshold. For example, a 2/3 vote may be required to amend a constitution, whereas bylaws might only require a simple majority.
The benefit of having both a constitution and bylaws is that it reduces potential duplication or conflict between the two documents. A constitution should contain the most basic rules and structure of an organisation, considered so important that they are not meant to be changed often. It is meant to be a brief document, serving as the fundamental framework of the organisation. On the other hand, bylaws can be more flexible and adaptable to the changing needs of the organisation. They can be amended to include new rules and policies that are relevant to the current context, ensuring the organisation remains well-governed and aligned with its goals.
It is important to understand the proper provisions and use of bylaws, especially in the context of nonprofit organisations. US courts take bylaws seriously, and disputes or legal actions involving organisations may hinge on the specific wording and interpretation of their bylaws. Therefore, it is crucial to keep bylaws up-to-date and relevant, while also ensuring that any amendments are carefully considered and in the best interests of the organisation and its members.
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Corporations usually only have bylaws, which would rank lower than the articles of incorporation
When forming a corporation, bylaws are required in most states. Bylaws are the internal rules and regulations of a corporation, established by the board of directors. They are detailed, internal documents that govern how a business will be organised and operated. They are not the same as articles of incorporation, which are shorter documents filed with the state to form a corporation.
Articles of Incorporation are public records, containing information such as the corporation's name and address, the number of authorised shares, and the name and contact information for the in-state registered agent. They are filed with the state when forming a corporation, and while they are important, they are not the same as bylaws. Bylaws are more detailed and specific to the corporation's needs, and they are not required to be filed with the state. They are, however, required to be kept on file at the place of business and provided to any shareholder on request.
Bylaws are established by the board of directors and pertain to board-level decisions and actions about the day-to-day running of the business. They cover areas such as the number of people on the board, the duties of officers, and formalities concerning shareholder and director meetings. They also specify how officers are chosen and removed, and they can include details about shares, such as whether they are voting or non-voting, and how they can be transferred.
While the board of directors has broad discretion in deciding what the bylaws should provide, there are two key restrictions: bylaws cannot conflict with provisions in the articles of incorporation, and they cannot violate the law. Bylaws are important because they provide a clear framework for the corporation's operations, ensure compliance with legal formalities, and help maintain a separation between the business and personal obligations or interests of those involved.
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Bylaws are taken seriously in US courts, with at least two cases coming down to what the bylaws said
Bylaws are an important aspect of organisational structure and governance, and their significance extends to legal proceedings as well. In the United States, bylaws are taken seriously in courts of law, as evidenced by at least two notable cases. The first case pertains to state government authorities, who create bylaws as "statutory rules" under empowering Acts. These bylaws are typically made or formally approved by the state governor and hold legal weight.
The second case involves nonprofit organisations in the US that are seeking Federal Tax-Exemption Status. To achieve this status, nonprofit organisations are required to adopt bylaws. While these bylaws serve as internal organising documents, they are crucial for filing the nonprofit 501(c)(3) tax-exemption application using Form 1023. This illustrates how bylaws can directly impact an organisation's legal standing and tax obligations.
Furthermore, municipal bylaws, which are a type of public regulatory law, can also carry legal consequences. These bylaws are enacted by local councils or municipal governments, deriving their authority from national or regional governments. Within their jurisdiction, municipal bylaws hold the same weight as any other law and can be enforced with penalties. This means that individuals or entities can face legal repercussions for violating these bylaws.
The importance of bylaws extends beyond organisational structure and into the legal realm. Bylaws can be unique to each organisation and serve as a form of self-governance, allowing members to agree on and abide by a set of rules. However, when bylaws are not adhered to or conflicts arise, it can lead to legal disputes that are taken seriously by US courts. Therefore, it is essential for organisations and individuals alike to recognise the legal significance of bylaws and ensure compliance to avoid potential legal issues.
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Frequently asked questions
A constitution contains the most basic rules and structure of an organization and is not meant to be changed often. Bylaws are the governing regulations of a corporation or society's internal affairs.
It is up to each organization to decide. Some organizations have one or the other, while some have both.
Bylaws should include how the organization governs itself and any fundamental rules voted on by the organization. They can also include election rules, committee terms of reference, member discipline, and duties of officers.
Bylaws should be amended every five to ten years as needed. They should be treated as a policy and procedure manual.
Yes, bylaws are legally binding. US courts take bylaws seriously, and there have been cases where legal action was taken based on what the bylaws said.
