Have You: Taken a Look at Your Articles of Incorporation?

Short post tonight.

Helping an organization look over their organizational documents and gauge what needs to be amended and what may need to be created. And in doing so, I thought of something.

Earlier, I wrote about needing to look at your by-laws and ensuring they stay up to date (particularly since these are so likely to change throughout the years).  But I”ve realized tonight that before you bust those out it”s even more important for organizations to take a look at their Articles of Incorporation (a.k.a Certificate of Formation or whatever else your formation documents are called in your part of the world). After all, in many states what your nonprofit has in its Articles will trump what is in the by-laws. And the particular danger with Articles is that they aren”t likely to change as much as the by-laws; meaning they won”t be on your radar when things do change throughout the years.

This is particularly important for organizations that have been around a while. Previously, much of what would go in a non-profits by-laws was required to be put in the Articles. So things like:

  • The number of directors you have
  • The number of directors needed for a quorum
  • Whether your organization has members (note the title “members” a few years ago had an entirely different meaning than what we would normally think of now. So where you may have been determined to have members before that may not be the case now)

Might have been included and might all have changed. Other things you want to be on the look-out for are:

  • Has your addressed changed?
  • Has your registered agent changed?
  • Has your purpose migrated any?
  • Is there a clause detailing how assets will be dedicated upon dissolution? Organizations seeking 501(c)(3) status these days are required to have such language. But there are states that require this language as well. You”ll want to make sure they don”t require all non-profits (both old and new) to have this language in their Articles.

If any changes have taken place then you”ll want to amend your Articles and ensure that what is in them fully reflects your current state. Here in Texas, an amendment would be filed with the secretary of state.

If you take-away nothing else, realize your Articles should be as “living” as any other document your non-profit deals with.