Non-Profit and Charitable Organization By-Laws
June 2nd, 2017 by Samuel Teichroew
The Corporations Act (Manitoba) allows the directors of non-profit or charitable organizations to pass by-laws governing internal procedures and corporate structures. Many organizations take the initial step of incorporation but fail to implement by-laws. The following are a few of the areas and issues that by-laws should cover.
Notice of Meetings
Well drafted by-laws provide for the necessary notice periods for meetings of the board of directors and members. Notice requirements should be kept to the statutory minimum to ensure flexibility and so that the Board can meet on short notice if there is an urgent need. The Corporations Act (Manitoba) requires that member meetings be held at least once a year but directors should meet more often. The by-laws should also state how notice needs to be given, whether by registered mail, regular mail, or email.
Quorum
Quorum is the minimum required amount of directors or members at a meeting for any business to be conducted. The numbers should be low enough to be achievable but high enough so that a minority cannot commandeer meetings. Normally the members or directors are required to be physically present, but the by-laws can permit them to attend by teleconference or videoconferencing (such as Skype© or Face Time©).
Removal of Directors
The by-laws should also include a procedure for removal of directors. The need to remove a director can arise when a director files for bankruptcy, loses capacity, or refuses to cooperate with the rest of the board. By-laws that provide for a mechanism for removal of directors can allow an organization to remove problem members or directors so the organization can move ahead.
Financial Year End
By-laws should not include a reference to the financial year end. Any changes to the by-laws require a vote by members. If the financial year end is referenced in the by-laws, it should be written as such that directors can change it by resolution.
Membership Requirements
If the organization wants to expand or has a broad base of support, one way to help keep its supporters involved is to allow them to be members who then elect the board of directors. This can help the organization to get outside perspective and ideas to help achieve its goals. Well drafted by-laws will have a mechanism that permits new members to be added to the organization and state the requirements for the membership as well as a mechanism for removing members.
These are just a few of the areas that can be addressed by by-laws for non-profit or charitable organizations. If you are a director of a non-profit or charitable organization, or plan to start one, please contact our office for more information.
Notice: The articles on our website are provided for general information purposes only and should not be relied upon as legal advice or opinion. They reflect the current state of the law as at the date of posting on the website, and are subject to change without notice. If you require legal advice or opinion, we would be pleased to provide you with our assistance on any of the issues raised in these articles.
