Bylaws

Posted on Wednesday, May 30, 2018

An organization’s bylaws are its internal operating rules.  When an organization applies for tax- exempt status, it must provide a copy of its bylaws with its application.  Neither federal tax law nor Indiana law requires specific language be included in the bylaws; however, some states do have specific requirements.  In addition, there is no Indiana law that requires an organization to file its bylaws with the state as it must with its articles of incorporation.  An Indiana nonprofit should adopt its bylaws either at its first organizational meeting or at the first meeting of its board of directors and maintain its bylaws as part of its records.

If there are no requirements for bylaws, what should be included?  Below are standard items to address in an organization’s bylaws.

• Name of organization
  • Organization’s legal name.
• Corporate purpose
  • Nonprofit purpose that it is organized exclusively for charitable, religious, educational, and scientific purposes.
  • Organization’s mission.
• Membership
  • Eligibility for membership.
  • Annual dues.
  • Member rights.
  • Categories of membership.
  • Or that the organization does not have members.
• Board meetings
  • Frequency of regular meetings.
  • Annual meeting.
  • Special meetings.
  • Definition of quorum.
  • Voting.
• Board of directors      
  • Process of electing and removing board members.
  • Minimum and maximum number of board members.
  • Terms, including re-election.
  • Required attendance at meetings.
• Officers
  • Process for electing and removing officers.
  • Title and responsibilities of each officer.
  • Terms, including re-election.
  • Vacancies in officer positions.
• Committees
  • Listing of standing committees.
  • Responsibilities of each committee.
  • Who is eligible to serve on each committee.
  • Use of ad-hoc committees.
• Corporate officer
  • Selection process of top officer (Executive Director or CEO).
  • General responsibilities of the top officer.
• Fiscal year
  • Annual accounting period on which its books are kept.
• Amendments
  • Process for amending bylaws.

The bylaws should also include the date that they were initially approved by the board of directors.  Subsequent amendments to the bylaws should also be approved by the board with the date noted on the amendment.

Keep in mind, that in return for being tax-exempt, nonprofit organizations are required to disclose certain information to the public.  One of the items required is an organization’s application for exemption (Form 1023 or 1024) and all supporting documents if filed on or after July 15, 1987.   Therefore an organization’s bylaws are open for public inspection. 

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

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