Bylaws

The bylaws of a nonprofit corporation are its second most important document. Bylaws basically serve as a corporations operating manual. Anytime someone wonders something like, "What's the maximum time one of our board members can serve?" or "How many board members do we need for a quorum?" they look to the bylaws for answers. Bylaws contain the rules and procedures for holding meetings, electing directors, appointing officers, and taking care of other essential corporate formalities.

State nonprofit laws also cover basic corporate governance matters, just like your bylaws. But you can choose different rules, as long as you put the rules in your bylaws and they don't violate state law. In any case, if a nonprofits bylaws dont address an issue covered by state law, the state rules usually kick in.

Often, nonprofits simply restate tax and governance rules in their bylaws. That way, they know that if they follow their bylaws, they are complying with state law and doing their best to maintain tax-exempt status. Restating state rules even if you don't vary from them is a good idea because it's more efficient to have all the important operating rules easily accessible in one document.

Whenever you have a choice, put material in your bylaws instead of your articles of incorporation, as theyre easier to change. The voting requirements to amend bylaws are generally less stringent and you probably wont need to file anything with the state.

Tags: bylaws rules state their nonprofit board members operating corporate governance