What are Bylaws?
The term bylaws is of Old Norse extraction and doesn’t refer to the term by in the modern sense. Instead, by translates to the word village, and you’ll note many cities and towns that end in by, such as Whidby Island. There are several modern meanings to the world, bylaw, but traditionally they could be called city or village laws and ordinances.
A government that has ultimate authority doesn’t pass bylaws of this type. Instead they are created by governments, like city councils that must answer to higher governmental authorities or institutions. For instance, in the US, if a city council passes a law or regulation, the law usually must be in keeping with the state to which the city belongs, and also possibly to the federal government. Mayor Gavin Newsom’s attempt to enact same-sex marriage laws in San Francisco, CA, was struck down by the California Supreme Court. Similarly any bylaw in a city may be subject to scrutiny or changes by the larger government to which the city answers.
Bylaws are also a part of organizing and structuring corporations, and determining how an organization will be managed internally. Bylaws for instance, set the required number of board members, voting procedure, the way matters are discussed at meetings, and much more. These laws have to conform legally in the state in which the corporation has its base of office. Further, anyone applying for incorporation status must submit bylaws with incorporation paperwork.
Large corporations usually have attorneys that draft each bylaw for the company and make sure none of these laws are illegal. Smaller corporations, even little nonprofits like parent organizations have to make up their own bylaws, which can take some doing if you don’t know which laws you need to have, and which laws might violate state or federal law.
Perhaps one of the easiest methods for drafting company rules of governance, if you’re incorporating a small nonprofit or for profit company, is to use materials from reputable companies like Nolo Press®, which publishes a variety of legal “how-to” books and even offers example bylaw types, sometimes called “canned bylaws.” A good tip if you’re using canned bylaw types from a how-to book is to be certain that the book is up to date. Laws governing internal structure in corporations change frequently.
You wouldn’t want to borrow someone’s ten-year-old book on how to do this, because if a single bylaw is invalid, your application for incorporation will be denied and you’ll have to rewrite each bylaw, or at least those that violate state or federal law. It’s also a good idea to buy a how-to book that is specific to your state, since you incorporate, in most cases, through your state, and each state has different rules for internal corporate governance.
When you do use canned laws, you may find some of them don’t work once your corporation is up and running. By board vote, you can change bylaws and you may need to submit changes to the state. This can be done as often as necessary, though generally, if you’ve put some thought into internal structure and procedure, it won’t need to be done often.
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