When was the last time you looked at the Articles of Incorporation or the Bylaws for your nonprofit? Have they been tucked away in a drawer somewhere since your Board voted to approve the bylaws and your nonprofit became a reality? While you’re probably not alone in having these documents out of sight and out of mind, it’s important to pull them out and compare what’s written to what’s really happening at your organization.
Based on a presentation from Pro Bono Partnership of Atlanta, here are ten questions to guide you through a review of your Articles of Incorporation and Bylaws. These are general guidelines and should not be construed as legal advice.
Articles of Incorporation
1. Do your Articles state your corporation will have members? This is an optional level of oversight to the Board. Ensure the answer matches the current situation. If not, reach out to an attorney.
2. What does your statement of limited charitable purpose/mission statement say? Is it broad enough to include everything your nonprofit is currently doing? Check for consistency with your bylaws, 990 forms, website, etc.
3. Do your Articles include the following: a prohibition against private inurement, a restriction of political activities, a statement directing the distribution of assets upon dissolution to authorized recipients only, and a director liability-exculpatory clause? It’s especially important for older nonprofits to check for that last one. Seek direction to revise your articles to add any of these required sections if they’re missing.
4. If your corporation has members, do your bylaws reflect accurate details about them? Your bylaws should include information about roles and responsibilities, term lengths, and procedures for resignation or removal.
5. What details are set forth regarding your Board? The bylaws should state the minimum and maximum number of directors, the election procedure and term length, and the resignation or removal process.
6. What details are set forth regarding Board meetings? There should be guidance around the number of directors to make a quorum, the procedures for scheduling and holding meetings, the process for voting on decisions, and provisions for Board roles and committees.
7. Have you included a no compensation clause and provisions regarding indemnification and Directors & Officers insurance? It is important that your indemnification provision matches the actual D&O insurance the organization has.
8. What officer roles and titles are detailed in your bylaws? Make sure these officers are in place or make necessary adjustments. If you have officers who aren’t listed in the bylaws, get advice from an attorney to amend your bylaws as needed.
9. Did you re-state your dissolution clause in your bylaws? This should be consistent with what’s in your Articles of Incorporation.
10. Do you have a process outlined for amending the bylaws? This process should include directions for how and when the Board can vote to make amendments.
If your review reveals discrepancies or missing items, it’s important to take the necessary steps to fix the problem. Pro Bono Partnership of Atlanta provides this type of review and advice for its clients. For nonprofits outside of its service area, see these resources to find organizations that provide legal services for qualifying charities:
Nonprofit Startup Resources by State – Click on your state, then jump to “Legal Resources”Where can I find "pro bono" tax or legal assistance for my nonprofit?