How To Amend Bylaws: Everything You Need to Know
If you need to know how to amend bylaws, there are a few things to know first. Bylaws are rules of operation that the highest level of your board must follow.4 min read
If you need to know how to amend bylaws, there are a few things to know first. Bylaws are rules of operation that the highest level of your board or nonprofit must follow. Members of the organization or board can vote to amend bylaws.
Amending Corporate Bylaws
Member's rights should always be protected when amending a bylaw by letting each member weigh in. Amendments can be discussed at regular meetings or at meetings specifically held to discuss them.
Members must receive a notification about the special meetings that covers:
- The exact wording of the proposed amendment.
- The bylaw before the amendment.
- How the bylaw reads after the amendment is adopted.
- The name of the person proposing the change.
- Why that person proposed it.
- Optionally, whether a committee or board agrees or disagrees with the change.
When it's time to vote, there must be a motion to Amend Something Previously Adopted. The amendment should follow all the rules except for the following:
- The bylaw determines if there needs to be a previous notice and a certain number of votes.
- First- and second-degree amendments must stay within the notice of the proposed amendment. For instance, if the notice says the amendment will raise dues to $10, then the alternatives can't go over that number.
- If the amendment passes, there can't be a second vote on it, but if it fails, a second vote is allowed.
- Multiples of the same question cannot be asked and considered.
Articles, sections, and subsections of an amendment can be changed. Specific changes you can motion for include:
- Cutting out words, sentences, or paragraphs.
- Adding words, sentences, or paragraphs.
- Changing words, sentences, or paragraphs to something else.
A revision is a large-scale change to a bylaw. It can completely replace a set of bylaws with a new set. The revision can be amended before it's adopted.
A resolution describing the changes made if an amendment is passed should be kept with the company's corporate files. Update the official records so that the whole set of bylaws is kept together.
It's almost always better to count the votes out, even if it's close to unanimous.
Amending Nonprofit Bylaws
Nonprofit corporations should frequently address their bylaws and amend them as the nonprofit evolves, or else they can be liable to lawsuits for not following their own bylaws.
Before nonprofits can amend a bylaw, they must make sure the changes follow their state law.
There are a few other things to consider when amending a bylaw, like the nonprofit's Articles of Incorporation.
You should never copy the bylaws of another organization, because of the following:
- That organization's bylaws might not comply with your state's laws.
- They might not include your organization's default rules.
- Their bylaws might not fit your organization's needs.
It's a good idea to have a lawyer with nonprofit experience review the drafts of new amendments so they can catch any inconsistencies or problems.
The procedure for changing bylaws is covered by the bylaws themselves, things like:
- How many votes you need to pass an amendment.
- What the notice for board meetings must say.
- The differences between voting directors and voting members.
Make sure everyone sees the new set of bylaws after the amendment has passed.
Nonprofits must tell the IRS when they've made “structural or operational” changes, like creating a new program. The list of changes can be sent to the IRS Exempt Organizations Determinations Office or filed as Form 990 or Form 990-EZ.
When amending nonprofit bylaws, look to change noncontroversial things first, like updating your address or email.
Overly specific bylaws can trap an organization, create paradoxes, and require frequent changes.
Discussing and Voting on Amendments
Outsiders, like professional consultants, are good at suggesting changes without seeming personally motivated so that it's easier for a board to discuss them.
A lot of bylaws allow for members to vote over email or phone. Voting by proxy, or having someone else come in and vote for you, should never be an option. Board members should be present themselves in case the proposal changes and they change their mind.
Bylaws that require a quorum, or a certain number of people attending the vote, are good because they make sure that a small minority doesn't make all the decisions. Attendance issues should otherwise be dealt with outside the bylaws, so the quorum isn't constantly changing.
In emergencies, an executive committee might be useful for making decisions without the presence of the entire board.
If you need help with looking over or amending your bylaws, you can post your legal need UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.