Illinois Nonprofit Bylaws
Your Illinois nonprofit bylaws equip your organization with the framework for its internal operations. Adopting your bylaws is crucial to your nonprofit’s formation process and should not be taken lightly. Bylaws lay out the rules for holding meetings, managing your board of directors, keeping records, and more. By defining these rules, your bylaws help prevent and resolve internal conflicts and help keep your nonprofit from dealing with disputes.
Use our attorney-drafted nonprofit bylaws template to get rolling on your bylaws today.
Why does an Illinois nonprofit need bylaws?
You’re not required to file your bylaws with the Illinois Secretary of State like your Illinois Articles of Incorporation, but that doesn’t mean your bylaws are less important. Your bylaws are likely to become public record, particularly if you apply for tax-exempt status, so make sure they stand up to scrutiny. It’s also good practice to keep a copy of your bylaws on file and available for members or in case of state inquiries.
1. Nonprofit bylaws are legally required in Illinois.
In the Illinois Compiled Statutes, 805 ILCS 105/102.25 states that bylaws “shall” be adopted at your nonprofit’s first board meeting. In legal speak, “shall” means “must.” So, if you want to remain in compliance with Illinois state law, you need to have bylaws.
2. Third parties will ask to see your bylaws.
You can expect many third parties to ask for your bylaws as a part of doing business. For example, banks, landlords, and partnering organizations commonly request to see copies of your bylaws to confirm the legitimacy of your nonprofit. Additionally, the IRS will review your bylaws if you seek tax-exempt status.
3. Nonprofit bylaws allow you more control over your nonprofit.
Not adopting bylaws can open the door to legal complications for your nonprofit. Why? Bylaws define the rules for managing your directors, compensating members, and dealing with conflicts of interest. Without these regulations in place, disputes over procedures are much more likely. Disputes can lead to state investigations and even court battles, negatively impacting your finances and reputation. Having strong bylaws in place helps safeguard your nonprofit from internal arguments and their consequences.
Want to learn more? Check out our Guide to Nonprofits.
What do Illinois Nonprofit Bylaws include?
Your Illinois nonprofit bylaws should begin with essential information about your nonprofit, like its name, address, and purpose. The rest of your bylaws should lay out the exact rules for your nonprofit’s internal operations. Bylaws typically include guidelines for:
- adding or removing board members
- giving notice and holding board meetings
- taking a vote and meeting quorum requirements
- handling conflicts of interest
- compensating directors
- keeping records
- amending the bylaws
- operating during emergencies
- dissolving the nonprofit
Your board can also tailor your bylaws by adding specific provisions as long as those provisions don’t contradict Illinois state law or your articles.
Are nonprofit bylaws legally binding?
Yes. Your nonprofit bylaws are a legally binding agreement for operating your organization. Everyone involved with your nonprofit’s operations, from employees to the board chair, must follow your bylaws. If your bylaws are violated, your organization and the individuals at fault could face negative legal consequences.
Are nonprofit bylaws public record?
This depends on your nonprofit. Since you don’t need to file your bylaws with your articles of incorporation, your bylaws will not become public record when you establish your business. However, your bylaws will be made public if you apply for 501(c)(3) tax-exempt status with the IRS because you must attach a copy of your bylaws to your application (the IRS makes all applications public).
Do nonprofit bylaws need to be signed?
No. There is no legal requirement for your nonprofit bylaws to be signed in Illinois. That being said, it is standard practice for your board of directors to sign your bylaws. This makes your bylaws look more official and sends the message that your board members are all on the same page about how to run your nonprofit.
Can nonprofit bylaws be changed?
Yes. According to 805 ILCS 105/102.25 your board of directors has the power to amend your bylaws. Provisions for amending your bylaws can also be added to your articles of incorporation or your bylaws themselves. In fact, we recommend providing rules for making amendments in your bylaws to minimize the possibility of board infighting over amendment procedures.
Who adopts nonprofit bylaws?
Illinois state law 805 ILCS 105/102.25 dictates that the bylaws of an Illinois nonprofit “shall be adopted by its board of directors” at the board’s first meeting.