How to Create Nonprofit Bylaws

Bylaws for Nonprofits

Bylaws refer to a document that a nonprofit creates that outlines how the nonprofit will conduct business. This document is used by the Board of Directors of the nonprofit to govern all the control aspects within the nonprofit. It is important when creating a nonprofit’s bylaws to exercise care because the bylaws, once adopted, will become the definitive legal document that is referred to in governance of the nonprofit.

The ways the nonprofit bylaws are used is:

  • Regulate and give structure to the nonprofit board meetings
  • State the purpose of the nonprofit
  • Protect the finances of the organization
  • Outline the nonprofit’s legal structure
  • Clearly state the financial policies
  • Circumvent disagreements
  • Explain in detail how the Board of Directors govern the nonprofit
  • Regulate the control the Board of Directors have within the nonprofit
  • Build an infrastructure for governing of the nonprofit
  • Explain the duty of officers and committees of the nonprofit
  • Outline the steps to amend and revise the bylaws

The nonprofit bylaws go hand-in-hand with the Articles of Incorporation in governing the organization and care should be given to making sure it has correct legal language. It is also necessary that the wording and language meet the Federal and state laws governing nonprofits and the regulations that govern them. This is important because once funds are given to a nonprofit there are specific regulations on their disbursement and distribution. There is also guidelines governing funds when the organization is dissolved.

A Legal Document

The bylaws must be approved and ratified by the Board of Directors to be established. This must be done at an official board meeting and also entered into the official corporate record book. Because the bylaws become a legal governing document it is wise to seek legal counsel when creating them to be certain they govern the nonprofit as wished.

Because the nonprofit is regulated by both the Federal and State government you should consult the guidance of each to make sure the bylaws adhere to them. Nonprofit guidelines can range from simple to very complex depending on the need for how strict you need the governance of the nonprofit. If the nonprofit needs to many regulations included in the bylaws the document can become very lengthy. It can be smart to limit the complexity of the bylaws so that the Board of Directors have flexibility in the way it is governed. However, if the specifics are too broad the Board of Directors may have too much leeway in its management.

Copyright 2011 Scott Michael Ringo