Businesses may be structured in different ways, depending on the goals of their founders and officers. Some businesses are structured as non-profits, which means they are intended to further a social cause and benefit the public. Examples include churches, public universities, charities, and certain hospitals. Since non-profit organizations (or NPOs) are not motivated by profit, they are given tax-exempt status by the IRS.
Similar to the bylaws drafted and followed by for-profit corporations, Non-Profit Bylaws are the rules put in place to serve as guiding principles and operating procedures for the NPO. If you’re forming an NPO, you’ll want to understand what these are, whether they’re required, how to write them, and what to do after they’re prepared.
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What are Non-Profit Bylaws?
After you’ve decided to form your Non-Profit Organization, you’ll want to outline the rules and procedures that will govern your organization. These are called Non-Profit Bylaws and they form a legal relationship between the NPO and its governing body. Because it’s intended to serve the public good, an NPO’s governing body usually is a board of directors whose purpose is to represent the public’s interests.
Non-Profit Bylaws are memorialized as a legal document that serves as an operating manual of sorts for the NPO. They may detail:
- How, and how often, meetings are held.
- Requirements for membership.
- Procedures for voting and passing amendments.
- Qualifications and duties of the president, secretary, and other board members.
- Structure of the board.
Are Non-Profit Bylaws required?
While the IRS does not require NPOs to have bylaws in order to comply with federal regulations, your state may require them upon registration. Regardless of state requirements, drafting Non-Profit Bylaws will help your NPO coalesce around shared goals while giving members and board members a better understanding of procedures and expectations.
What information is included in Non-Profit Bylaws?
Your Non-Profit Bylaws shouldn’t be so detailed as to cause roadblocks and frustration, but they should contain certain elements that both guide the governance of your NPO and provide for certain contingencies. No two NPOs will have exactly the same bylaws, but every NPO should consider including the following items:
- Indemnification. Statement limiting the personal liability of the NPO’s board members.
- Membership. While the NPO doesn’t need to have members, you’ll want to outline their rights (such as voting rights) if it does.
- Board member basics. Minimum and maximum number of board members, the minimum number required for quorum (for making decisions on behalf of the NPO), how they’re elected, and their term limits.
- Officer titles and term limits. Duties and responsibilities of each officer by title, how they’re elected, the length of each term, and term limits.
- Procedures for removal. The rules and procedures for removing a board member or officer, which should also include reasons for removal.
- Conflicts of interest. What constitutes a conflict of interest, how they’re resolved, and penalties for failing to disclose them.
- Board meetings. The minimum number of board meetings each year and the procedures for calling a special or emergency board meeting.
- Committees. How they’re created (and dissolved) and their powers.
- Amending the bylaws. Rules and procedures for changing your Non-Profit Bylaws.
How do I write my own Non-Profit Bylaws?
You may draft your own customized set of bylaws using the Rocket Lawyer Non-Profit Bylaws document builder, which also includes an option to have an attorney answer your questions if you need help during the process, all on the same platform.
If you haven’t yet filed your paperwork to form your Non-Profit Organization, why not let Rocket Lawyer do the heavy lifting for you? Just answer a few simple questions and Rocket Lawyer will reserve your business name and file your paperwork.
What happens after the Non-Profit Bylaws are prepared?
If your state requires you to submit your Non-Profit Bylaws as part of the NPO registration process, then the rules in your bylaws will supplement broader rules that apply to all NPOs in your state. Even if the bylaws are not required, they will still carry the force of law once signed by the relevant parties.
It’s important to revisit your bylaws every three or so years to ensure that they still align with your NPO’s values and mission.
Set up your non-profit organization for success
Whether you’re starting a partnership, limited liability company, corporation, or non-profit organization, proper preparation is the key to success. Regardless of whether your state requires you to draft Non-Profit Bylaws as part of the registration process, it’s advised that you do so. Bylaws will help your NPO function properly and provide important contingencies when needed. If you need help, don’t hesitate to ask a lawyer.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.