Have You: Looked At Your By-laws

With every new year comes new circumstances. After a couple of these new year’s an organization can find itself with by-laws that are totally inapplicable. Consequently, organizations should make it a point to look over by-laws and other governing documents every year.

Here are a few things to take special note of when giving by-laws a look-over:

1. Address: Has your addressed changed? (you’d be surprised).

2. Purpose: Does your purpose still align with that listed? Are you still targeting the same constituents?

3. Term Limits: Are your directors exceeding the terms originally put in place?

4. Regular Meeting: Does the meeting time and place listed meet present reality?

5. Quorum: Are decisions being made with the requisite number of directors?

While you’re in there, here are a few things I’ve noticed missing in alot of the by-laws I review. If they’re not already in there, you might consider adding them:

1. Limitations on Activities (What activities are prohibited?)

2. Prohibition Against Private Inurement.

3. Distribution of Assets (How will assets be distributed at dissolution).

4. Conflict of Interest Policy.

5. Maintenance of Corporate Records.

6. Insurance for Corporate Agents.

7. Right to Inspect.

8. Director Qualifications (not everyone has to qualified to be on your board).

At the end of the day, by-laws are all about style. What is in one set of by-laws may not be in another. But always make sure you are in compliance with federal and state law. There is certain language that the IRS likes to see when organizations apply for tax exemption. And there are certain states that require language (like that concerning the distribution of assets) to be present. For a few more ideas on what to have in your by-laws check out this short article at Blue-Avocado. For guidance on what your state might require in by-laws look at a recent posting by the IRS here. Citizen Media Law Project and Hari Srinivas provide a good framework for by-laws as well.