Bye-laws of a non-profit corporation have set rules that govern the organization’s operation. They have rules and procedures to organize meetings, make directors, appoint officers, and take care of other necessary formalities. As a non-profit develops and changes, its bye laws should be periodically reviewed and amended to respond to these changes. For example, a growing non-profit organization might want to expand its board size or redefine the duties of some of its members. If a non-profit person can not show that his work is in accordance with the requirements of his by-laws, then it will be vulnerable to lawsuits by its members, auditors or vendors.
Drafting Your Proposed Amendment
Understand your state’s nonprofit corporation law.
Is governed by a law in a non-profit state in which it was included. Before you draft a bylaw or amend an existing bylaw, it is important that you review your state’s nonprofit corporation law so that its default provisions and its prohibited practices are understood.
Confirm the change made by you is not prohibited by state law. If so, the modification will not have any effect and any work done for it will be zero and zero. For example, the Washington State provides the Nonprofit Act: “In any case, the number of a quorum will not be less than one-third of the number of fixed or stated directors.” This means that any bye-election in the Washington State allows less than one quorum. More than one third will not be valid.
Refer to the default provisions in your nonprofit corporation law, such as the minimum required vote in a vote by the board of directors. If you want to override them, then modify your bylaws to reflect this change.
In the plan that you will vote for safe approval for your amendment, review how members (if voting is a member) and directors are allowed to meet and vote under state law. Many state nonprofit corporations do not allow the directive to vote by proxy by the directors, instead, a director needs to be present in the meeting or to attend the meeting for the purposes of quorum and voting through telephone it occurs.
Make sure your proposed amendment is consistent with other regulatory documents.
In addition to ensuring that your proposed offer is in line with your state’s nonprofit corporation law, you should also check that it is in line with the incorporation of nonprofits and, if applicable, other relevant laws.
If your organization is operated or licensed by a state agency, such as the education department or banking department, review the state laws in those areas for additional compulsory bylaw provisions.
For example, if you want to amend the Bye-laws of a Home Owners Association, you must mention both your state’s nonprofit law and its Home Owners Association Act. If the Home Owners Association Act specifies that board meetings should be open to the members, then your members should be allowed to attend board meetings, even if your state does not require nonprofit law.
Don’t rely on language found in bylaws of other organizations.
Avoid taking the language for your proposed bylaw from bylaws of other organizations. Bylaws of any other organization can:
Not in compliance with the law in your state.
Under the applicable law, there are no significant provisions that apply to your organization by default.
Not adapted to meet the needs of your organization.
Address all foreseeable scenarios.
Think about all the possible scenarios that may arise in relation to your proposed amendment and can address them in the language of Bylaw.
For example, if your revisions describe the removal process of a member of the board, then you must include a provision to fill the situation on its removal.
Have a lawyer review the amendment.
If you have any doubts about your proposed amendment or plan to amend the Bill, which will replace them adequately, then ask an attorney who specializes in nonprofit law to review all your draft modifications. A lawyer will be able to spot anomalies and potential problems with the proposal.
For example, an attorney will be familiar with the nonprofit law of your state and will be able to capture the provisions in your draft that may be invalid because they struggle with the minimum requirements under the law. If you live in a city, your lawyer will also be familiar with the rules of the city that affect your bye-laws, as it is necessary that an elected official or government employee will serve on your board.
Be prepared to explain why the amendment is needed.
To secure approval for your own voltage, you will need to explain to the board that your modification is needed. Generally, two-thirds of the board will need to vote in your favor. For this reason, it is important to consider whether you will explain the reasons for modifying the current reasons.
For example, if your organization’s activities are no longer within the scope of your mission, then you have to amend your mission statement. Prepare to understand that what basic activities were originally conceived for the organization, how they evolved, and what specific amendments in the mission statement reflect this new reality.
Review the current bylaws.
The rules for amending the by-law of a non-profit organization are included in the bylaws themselves. To ensure that you make amendments in your bye-laws, those who will not be challenged in court, review the current bye laws for the necessary procedures.
Look at the percentage of the board that should vote in your favor (usually two-thirds).
For any modification to give to the Board before voting, look for it.
If your organization’s members also have voting powers, then see how many percent of the voting members should vote in favor of an amendment and what kind of notice they should give them.
Keep in mind that the procedure for amending the by-laws is the same, whether you want to amend the existing provisions, add new provisions or remove the provisions.
Notify the Board of Directors of your proposed amendment.
If you need your by-laws, you will need to give notice of your proposed amendment to your board members before deciding whether to approve it or not.
Keep your proposed amendment in writing and broadcast it among board members so that they have the opportunity to ask and consider questions about you.
Present the draft revision with the explanation that you believe why the amendment is necessary.
Hold a vote of the Board of Directors on the amendment.
Request that the Board meet to discuss your proposed amendment and vote to approve it.
If the proposed amendment is a minor and your sub-rules do not need to give you the members of the board notice before the meeting before the meeting, you can propose the amendment and can vote in the same meeting.
Who should be in the meeting, how many should be present in the meeting, and follow the rules to get the percentage of votes required for amendment to be valid.
Record the result of the vote and keep a copy with your other corporate letters.
Write the amendment into the bylaws.
Once you have received the necessary approval for your modification, then draft a new document that includes your full biolas including amendment. Operate new rules between board members and any other related persons.
Inform the IRS.
If your nonprofit has been recognized by the IRS as tax-exempt, then you are obliged to inform the IRS of the “structural or operational” changes of your bylaws.
An example of a structural or operational change will create a new program.
If this is your case, either submit the letters describing the changes of modified bylaws or IRS exemption organizations to the office or report changes by filing Form 990 or Form 990-ez.