What Are Bylaws Used for?

Bylaws are something every organization should have. It is one of the first requirements that any business entity, profit or nonprofit, must develop before it can begin to fully operate. Both businesses and associations need rules to operate efficiently.

Definition

Bylaws are the laws of the organization. They determine how a company or nonprofit is governed and can be considered an internal constitution.

Function

Bylaws define organizational structure, officer and member duties and the decision-making process. Examples include the election and term of officers and what determines a quorum. Bylaws are required before a company can be incorporated.

Benefits

Bylaws create mutual understanding about to how an entity operates; everyone knows what to expect by reading the bylaws. They represent a contract between the organization and its members. Bylaws cannot be changed on an impulse; even a unanimous vote at a meeting cannot suspend the bylaws.

How Bylaws Are Changed

Since bylaws govern the organization, careful consideration is given to changes. Amendments can be proposed but cannot be considered until everyone has had ample review time. Some bylaw amendments require a supermajority (two-thirds of the membership, for example) for adoption.

Misconceptions

The term "bylaws" can give the impression that these rules are secondary laws, but the origin of the word is to blame for this. The term "by" came from a Norse word that meant village, and bylaw became known as a body of customs for a village or manor.

References

• Bylaws--reasons and guidelines
• Bylaw history
• Writing corporate bylaws