Constitution and By-Laws
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An organization is governed by its constitution and by-laws. Simply stated, by-laws determine who has power and how that power will work. They provide the agency with the structure it requires to carry out its business and to help prevent disagreements and conflicts. Because of this, the board must ensure that its by-laws are current and relevant to the needs of the agency through regular reviews and by-law updates to reflect agency changes. Agencies are usually asked to submit a copy of their by-laws when applying for financial support.
The following section discusses the general guidelines for establishing and reviewing bylaws.
Establishing By-Laws
Depending on the size of an agency, a committee may be appointed to prepare simple and brief by-laws. An appropriate amount of flexibility should be built into the by-laws so they do not act as a straightjacket for the agency. Copies of the proposed by-laws should be sent to all members of the agency with the call to a meeting, at which time they will be discussed and approved. It is important that an organization seek some legal counsel before finalizing their documents.
At the beginning of the discussion regarding adoption of the proposed by-laws, a motion is made and seconded to adopt the by-laws as a whole. Under this motion the by-laws are considered, one article at a time. Time is allowed for discussion and amending each article before proceeding to the next one. When the members have discussed and amended each article as desired, the chairman takes a vote on the by-laws as a whole. A majority vote is necessary to adopt the by-laws. However, a two-thirds vote is usually necessary to make changes in the by-laws once they have been adopted.
By-laws go into effect immediately upon adoption. If it is desired that this be postponed until a certain date, a schedule for the time when they will become effective must be approved by majority vote when the by-laws are adopted. This schedule may be for one item or section, or for the by-laws as a whole. Once the members of an organization have voted to adopt a set of by-laws, the organization is officially in business.
Once they have been adopted, by-laws cannot be suspended--not even by unanimous vote. Every member should have a copy of the by-laws, and the by-laws and basic procedures of the agency should be reviewed annually.
By-laws may be changed according to the rules for amendment which are part of the bylaws.
As outlined in the guide Understanding the Law: Beginning and Incorporating a Non-Profit Organization by the Community Legal Education Association, the following is a brief discussion of the areas that should be dealt with in the by-laws:
1. Membership
Who can be a member, terms of admission, members’ rights and obligations, and how membership ceases should be dealt with. There is no limit on the number of members and more than one class of membership (i.e. full, associate and honourary) can be created. If membership fees are required, a procedure for payment and determining fee rates should be stated.
2. Directors
Numbers of directors, how are they chosen, length of term, how they can be removed, and how often they should meet should be specified. Special offices such as treasurer and secretary should be described. A statement outlining qualifications for a position of director is recommended. Any individual can be a director if they are 18 years of age or older and if they are not bankrupt. Also, it is suggested that directors hold office for more than one fiscal year so that the organization can benefit from the expertise gained.
3. Fiscal Year
Since the annual general meeting of members usually occurs shortly after the close of the fiscal year, the organization should choose a fiscal year which is convenient to most of its members. As a matter of interest, the government’s fiscal year end is March 31.
4. Meetings
Since there must be one annual general meeting of members, a clause should be included setting out how, and during which month, this meeting will take place. All members of the organization should be given at least 21 days’ notice of a general meeting. Another clause should deal with the procedures for calling special and directors’ meetings and the number of people required to constitute a quorum. A quorum is the minimum number of members that must be present to have a valid meeting. All members of the board of directors must be given notice of directors’ meetings.
5. Voting
Matters such as voting eligibility and tie-breaking procedures should be dealt with. Unless the by-laws provide otherwise, voting is by a show of hands or by ballot.
Also, it should be determined whether proxies will be allowed. A proxy is a person appointed to vote for someone who is not present.
6. Amendments
It is important that by-laws outline steps by which they can be changed when it becomes desirable or necessary to do so. Unless the by-laws state otherwise, the directors may amend any by-laws that regulate the business of the organization.
The amendment must then be passed by at least a majority vote of the members (and often an organization will specify a two-thirds vote is necessary in its by-laws).
7. Record Keeping
Recording and keeping of minutes should be provided for. Minutes are records of decisions made at meetings. Also, the financial records of the organization should be available for the membership to inspect.
Worksheet
By-Laws Checklist (PDF)
