What Are Nonprofit Bylaws?
Nonprofit Bylaws is the document that determines how a nonprofit will do business. If you have a nonprofit, I believe you should have a great set of bylaws that govern your nonprofit. A nonprofit’s Board of Directors use the Nonprofit Bylaws as a guide to govern the nonprofit. Because of this, it is important to exercise care when creating the nonprofit bylaws because they will become a legal document outlining the definitive way the nonprofit will operate.
Nonprofit Bylaws are used to:
- Structure the nonprofit board meetings
- Define the purpose of the organization
- Safe Guard the organizaitons assets and money
- Define the financial and legal structure of the nonprofit
- Determine how disagreements are resolved
- Set all the guidelines for the board and how it governs the nonprofit
- Outline the authority of the Board of Directors and the control it has within the nonprofit
- Give the nonprofit its governing infrastructure
- Define the nonprofit officers as well as committees and outline their duties
- Contain the steps to revise the bylaws in case they need amendments
Just like the Articles of Incorporation, the nonprofit bylaws should use correct language so that it follows federal and state laws concerning nonprofit organizations and the ways in which they are regulated. Once donations become assets of a nonprofit there is also specific guidelines as to how those assets can be distributed as governed by law.
Nonprofit Bylaws is a Legal Document
Once the nonprofit bylaws are created they must be approved and ratified at a Board of Directors meeting and recorded in the official corporate record book. Bylaws are legal documents once they are approved and ratified and and as so, they should not be treated lightly. As with any legal document, it is a good idea to seek the counsel of a lawyer to make sure you understand how the bylaws will govern and affect the nonprofit.
Each state is unique in what needs to be included in the bylaws. Check with the state your nonprofit does business to make sure the nonprofit bylaws adheare to to its guidelines. The simplicity or complexity of Nonprofit bylaws can vary depending on the amount of rules and regulations you need to include in them to govern the nonprofit. It might be wise to keep the bylaws brief so that the Board of Directors have some latitude when making decisions regarding the nonprofit.
Only you can determine if you have the knowledge and understanding to put your own bylaws together or not. Much of the difficulty in creating bylaws is determining what information should be included in them. I believe most people can create a great set of bylaws. Because of that, I included a guide to creating bylaws and included it in the The Simple Nonprofit Starter Bundle . The guide includes much more detailed information about creating bylaws and I have also included a Sample Nonprofit Bylaws that can serve as an outline to creating bylaws.
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