Delaware Nonprofit Bylaws
Nonprofit bylaws list out the rules and internal processes for the board of directors to follow, including things like how to vote, when to hold board meetings, how to keep records, and more. You can think of the bylaws as your nonprofit’s user manual.
Crafting your nonprofit bylaws is the first step that your nonprofit will make. Nonprofit bylaws are not filed with the state of Delaware, but they are are an important part of maintaining a successful nonprofit. Our attorney-drafted nonprofit bylaws can help you get started.
Why does a Delaware nonprofit need bylaws?
A nonprofit needs bylaws in order to give the board of directors, officers, and employees a rule book to stay in legal compliance. This includes all the internal processes, from solving conflict to appointing new board members. Unlike your Delaware certificate of incorporation, you do not need to file your bylaws with the state.
The bylaws include internal processes where there are no state-mandated processes already established—or processes that add onto the already-there state requirements to make processes more thorough and personalized.
1. Nonprofit bylaws are highly encouraged in Delaware.
Delaware nonprofits are not legally required to have bylaws in order to maintain good business standing with the state. DE Code § 109 states that nonprofits “may adopt” bylaws, making them technically optional. However, adopting bylaws is highly encouraged. Having clear bylaws is essential to running your nonprofit successfully.
2. Third parties will ask to see your bylaws.
Beyond being used to solve disputes and for guidance during emergencies, bylaws work as confirmation of the nonprofit corporation’s existence. They are used for donors looking to invest and for proof of business for opening a bank account.
Most importantly, they are required by the IRS if you are submitting your nonprofit for 501(c)(3) tax-exempt status. Your bylaws must be included with your tax exemption application, and will become public record at that point.
3. Nonprofit bylaws allow you more control over your nonprofit.
By having clear bylaws, a nonprofit maintains control over the internal processes of the business. Bylaws streamline decisions and help prevent disputes from arising, keeping you in charge of how things are handled. However, if the bylaws are not comprehensive, the state of Delaware might step in when disputes arise and decide if the actions were legal or not. Bylaws keep the control in the internal processes.
Want to learn more? Check out our Guide to Nonprofits.
What do Delaware Nonprofit Bylaws include?
Your nonprofit bylaws can include anything not already covered as a legal process in Delaware, as long as it does not contradict the state’s statutes or your nonprofit’s certificate of incorporation. Typically, this includes information such as:
- General information
- Statement of purpose including mission and goals. (If applying for 501(c)(3) tax exempt status with the IRS, confirm that you are using the specific language the IRS requires!)
- Board of Directors term limits, quorum, and process for hiring new members
- Voting procedures
- Committee formation procedures
- Conflict of interest policy
- Bylaw amendment process
- Dissolution process
Are nonprofit bylaws legally binding?
Yes, bylaws are legally binding. Alongside federal and state business statues, your bylaws are practices that the nonprofit must follow. This is one reason why making sure that the bylaws are adopted at the first organizational meeting is important.
Are nonprofit bylaws public record?
Not necessarily. A nonprofit’s bylaws are fundamentally an internal document that does not need to be submitted to the state or made public. However, if your nonprofit applies for the 501(c)(3) tax-exempt status with the IRS, your bylaws must be included and will then be made public.
Do nonprofit bylaws need to be signed?
No. Bylaws do not need signatures to be legally binding. We do recommend gathering board members’ signatures at the first organizational meeting, however, as you bylaws will be in place from this point forward. Signatures ensure that everyone is on the same page.
Can nonprofit bylaws be changed?
Yes! As your nonprofit grows, you will likely need to adjust and amend the bylaws to keep your nonprofit running smoothly. According to DE Code § 109, “the power to adopt, amend or repeal [nonprofit] bylaws shall be in its members entitled to vote.” Including the process for amendments in your original copy of the bylaws makes this an easy internal process.
Who adopts nonprofit bylaws?
The board of directors or incorporators will approve and adopt the bylaws at the first organizational meeting.