Tuesday, January 31, 2017

Non-Profit Series: 4. What is the Difference Between Articles of Incorporation and Bylaws?

Written by Sagan L. Carman-Downer

In order to form a non-profit corporation, state law requires that you file a document called the articles of incorporation. Some states, like Nebraska, also require that you create and adopt internal rules called the bylaws. Typically, provisions in the articles of incorporation are included to provide information to individuals outside of the corporation. Provisions in the bylaws, on the other hand, are included to provide information to individuals inside of the corporation.

Articles of Incorporation
The articles of incorporation will be filed with the state where the non-profit is located. The state agency where they are filed will keep them on file and have them available for the public to view. In Nebraska, the Secretary of State keeps a database online where anyone can pay a small fee to get a copy.

The articles of incorporation are often required to include the following information of the corporation: the name, the address of its office for service of legal documents, the name of the agent for service of legal documents, and the names of the people incorporating it. Depending on the state, there may be additional information required. For example, in Nebraska you must include whether or not the corporation will have members. If the corporation wants to include additional information, it can as long as it is not contrary to state law. The main benefit of including information in this document instead of the bylaws, is that because it is filed for public viewing, it can provide notice of these matters to the public.

Some states, like Nebraska, also require that the corporation create and adopt rules for internal operations, called bylaws. The bylaws are not filed with the state, and thus are not available for public viewing. The bylaws can contain any provision related to the internal operations so long as it is not inconsistent with law or the articles of incorporation.

Some matters commonly addressed in the bylaws include things like: voting requirements, compensation of board members or officers, authority of board members or officers, and information on how and when meetings will be held. If the corporation has members, the bylaws can include qualifications or requirements of members. For example, the bylaws may require that members pay dues or volunteer a certain number of hours to retain membership.

As always, this information is provided as a general guideline, as not as legal advice. The requirements may vary depending on the state where you are located and the type of non-profit corporation you are operating. For more detailed information on what you should include in each of these documents, it is best to speak with an attorney in your state.

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