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May initial directors of nonprofit approve bylaws binding on members?

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May initial directors of nonprofit approve bylaws binding on members?

If a 501(c)(3) is organized to contract with the state to manage an historic site, writes bylaws, signs a management agreement with state but has not yet had a membership meeting to approve said bylaws, are those bylaws valid for the current un-elected board of directors? We have a former administrator that claims that there are no bylaws until they are approved by the membership.

This is a matter of state law, but the answer is probably yes, bylaws adopted by the initial incorporators or directors are valid and binding on the members.  A state nonprofit corporation law is likely to contain a special provision for the organization of the corporation.  These normally say that the incorporators (the people who sign the articles of incorporation for submission to the state to form the corporation) should hold an “organizational meeting” at which to name the initial directors (if not named in the bylaws) and to approve the initial bylaws and other items for initial operations.  If the initial directors were named in the articles, the initial directors should hold the organizational meeting and approve the bylaws and other items of initial operations. 

The Pennsylvania nonprofit corporation law specifically says that the initial bylaws approved by the incorporators or the initial directors at the organizational meeting are binding on the members. 

You don’t say when your organization first had voting members, but it sounds as if they were identified only after your bylaws said who was eligible to be a member, and after you filed for your application for 501(c)(3) exemption, which requires the submission of bylaws unless you submitted the 1023-EZ.  The Pennsylvania law also says that where there are no members in fact, the directors have the power to do everything, including the power to pass bylaws binding on members (if and when they come into existence). 

Unless your initial members were set out in your articles of incorporation, your bylaws would probably be valid under one of the principles set out above.

Tuesday, November 28, 2023

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