Every organization, nonprofit or private needs to be governed properly in order to carry out their mission and vision. Both corporate entities and foundations they support and run have to have a solid organization and something to show for it so that they can function and serve their clients and beneficiaries well. But if you bring up the topic of a constitution or a nonprofit’s bylaws, you can bet that most people would give you an interesting but frustrating response. You may also see legal agreement templates.
For most organizations, especially charitable entities, their bylaws are completely forgotten, done and dusted after orientation of new members, treating it as some sort of non-existent document or something close to an archived trash that serves no purpose, building dust in a cabinet somewhere at the back of the administrative office. Even the current board who have probably prepared signed and made some amendments to them have no knowledge of most of the provisions indicated in their constitution. And they don’t use the bylaws for reference without much reason either.
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For some who treats the bylaws as an integral part of the stronghold that keeps their foundation at the core of public service, the bylaws can be a useful glimpse into which the organization has continued to govern itself. Would you call them control freaks, or are they turning out to be the exact opposite? You may also see
What are Bylaws?
Bylaws by definition, also spelled as “by-laws,” are the rules a corporation sets. They are established by the board of directors during the time the corporation is being formed. This process is called incorporation, and one of the first tasks of this new corporation will be to form corporate bylaws. They are the rules written to control an organization’s internal affairs. You may also see legal agreements.
Generally, Bylaws includes the definition of many things necessary for an organization to exist and perform according to its mission, such as it’s official name, purpose, officers’ and members’ titles and their respective responsibilities, requirements for membership, grounds for termination, how positions and offices are assigned, how meetings are conducted and how often. Along with the Constitution, it is necessary for a group to govern the way they are expected to function as well as the responsibilities and roles of their leaders. You may also see legal notice templates.
Bylaws are therefore very important in mapping out an organization’s purpose and the details to how it should deal with its day-to-day business. It also counts as the legal backbone and guidelines of the foundation, where the foundation can experience challenges in court for violating provisions in the existing bylaws. For most non government and charitable foundations, they at least have to be filed with the Secretary of State of that particular state, in which you should be registered or incorporated. You may also see legal statement templates.
Foundations defined are also a charitable foundation, “is a legal category of nonprofit organization that will typically either donate funds and support to other organizations, or provide the source of funding for its own charitable purposes. Foundations incorporate private foundations and public foundations.” This type of non-profit organization differs from a private foundation which is typically endowed by an individual or family. You may also see legal notice templates.
What Bylaws Aren’t
Bylaws have been called a lot of names before, with standard operating procedures or policies and procedures to be just a few of them, but those are just wrong because there’s so much difference between them, as policies only deal with day-to-day operations and how this should be handled, without the force of law behind it, which bylaws can’t do without. One thing remains to be true though. A foundation’s bylaws serve as a legal document dictating how the organization must be governed. It’s more than just a rule book. It’s practically a bible which everyone, especially officers, uses a guide would they be in doubt with how to deal with a certain situation. You may also see legal contracts.
Importance of Bylaws in a Foundation/Organization
If the board fails to abide by what is stipulated in the bylaws, it can prove to have damaging consequences to the organization as a whole. It could even lead to potential damage to the members of the board themselves. Because bylaws are a major part of the organization, it also stands to prove that their provisions and how they should be followed, aren’t things to fool around with, but to be taken seriously. While it might not hold the same importance as other legal documents for foundation directors, leaders and members, bylaws are still the backbone of nonprofit governance, thereby making them a very important document. You may also see legal memo templates.
People sometimes need to check their bylaws for reference to disputes and issues in the organization’s structure, validity of votes and how some meetings are to be presided, only to find out that their provisions are very much outdated and doesn’t apply to the current practices of the organization and are not conforming to the law. To ensure that you are still in compliance with the state and existing federal laws, you and your members need to regular checking or the bylaws so that you can update it when needed. It would also help ensure that provisions are given to accommodate the current needs of the organization and the manner by which it is currently operating. You may also see lawyer resume templates.
Preparing the Bylaws
To have a better chance at developing or amending the bylaws that would fit the current demand of the foundation and to make sure that the sections and provisions are written in accordance with the state laws, a committee needs to act in charge of gathering all necessary information to draft it. Committee members should be the ones to do a research on the bylaws of other reputable nonprofit organizations or corporate foundations locally as well as foundations with the same type of mission or work as yours do. You may also see legal cover letters.
This would offer a foundation for both the local region as well as the industry, as it gives the committee a clear view of how organizations should be governed. It’s also the committee’s responsibility to consolidate what existing policies and procedures you currently have to serve as a reference in the drafting of the bylaws. Where certain policies are lacking, the committee should write something that would address the issue subject for the board’s approval. You may also see legal invoice templates.
Generally, the board is the one who approves the bylaws drafted by a majority when they conduct an official board meeting. Only a quorum of directors in attendance would validate the bylaws. When there’s a missing vote or signature, the bylaws will be rendered invalid and would therefore need editing for some provisions that some members of the bard may have not agreed to. You may also see sample legal resume templates.
Whatever issues there are, should be addressed and discussed properly so that the enactment of the bylaws wouldn’t be delayed. Ideally, it should already be completed at the start of the foundation’s calendar year or when they elect officers. The committee would then circulate the bylaws to the members and allow them to ask questions and the directors need to provide detailed answers, which they may need to consolidate into one document for everybody’s reference. You may also see sample land contract forms.
The committee would typically have one person with this role who keep tabs and monitors the whole process until there’s a final draft at the board meeting for acceptance. After the approval of the bylaws drafted, organizations usually require a presentation by the board, of the final version at the meeting for formality and ratification which is very important. You may also see simple business form templates.
Implementation of Duties
After the approval and ratification of the bylaws, after it has been finally considered to be adopted by the foundation, the committee has to produce copies which would be available in every place where your business or operations take place so that everybody has no excuse to miss out on any provision and violation or neglect of duties would be dealt with as stated in the bylaws, so that everybody, from the board to the members would comply. You may also see form templates.
For some organizations who provides salary to their working staff, the committee has the responsibility to manage the bylaws and make them have the necessary applications to the sections concerning employee’s responsibilities and job descriptions. Other important sections would include the stating of policies and procedures referring to the bylaws and would therefore need to be implemented in all applicable areas of the business, such as the hiring and compensation policies for staff recruitment, among other things. You may also see last will and testament templates.
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Your foundation’s bylaws or any organization’s bylaws for that matter serve as the most relevant guide book of your internal affairs and how you handle them. Bylaws are undisputed in the establishment and enforcement of procedures for decision-making, holding elections, the voting process for the most important stuff which an organization is often subject to, organizing meetings, requirements of quorum, membership requirements and other matters essential to your foundation. It’s more than just a manual. It’s what would serve as your cheat sheet for handling operations of the corporation in an organized, orderly manner. You may also see corporate bylaws templates.