Maryland Nonprofit Bylaws
Maryland nonprofit bylaws consist of rules and guidelines for the nonprofit’s operations. Bylaws are one of the most important internal documents a nonprofit will have, covering everything from handling conflicts of interest to emergency procedures. Need help drafting? We’ve got you covered with our free attorney-drafted template.
Why does a Maryland nonprofit need bylaws?
Unlike your Maryland Articles of Incorporation, the state does not require that you file your bylaws with the Secretary of State. Bylaws are an internal document that should be maintained with your corporate records. Why?
For many reasons! Bylaws are like the user’s manual for your nonprofit. By crafting thorough bylaws, you clear up the need for guesswork in your daily operations and emergency procedures. Good bylaws are the foundation for a successful nonprofit.
1. Nonprofit bylaws are legally required in Maryland.
Bylaws are mandatory in Maryland. Specifically, MD § 2-109 includes adopting bylaws in their list of mandatory actions nonprofits must take at the first organizational board of directors meeting.
2. Third parties will ask to see your bylaws.
Nonprofit bylaws can be used as proof of existence for banks, demonstrations of good business practices to potential donors, and as (mandatory) supplemental materials for the 501(c)(3) tax-exemption status application with the IRS.
3. Nonprofit bylaws allow you more control over your nonprofit.
If your bylaws are unclear or insufficient, your nonprofit is more likely to face unpredictable legal consequences. Nonprofits do many tasks each day—from amending Articles of Incorporation to responding to conflicts of interest—that could result in disputes if there are not clear guidelines for what the process should be.
If your nonprofit does face disputes, the state of Maryland could step in and decide whether or not the dispute is valid. This takes the process for handling disputes out of your hands and into the state’s.
Want to learn more? Check out our Guide to Nonprofits.
What do Maryland Nonprofit Bylaws include?
Maryland nonprofit bylaws can include anything about your nonprofit’s processes and procedures as long as they fit with the state’s legal statutes (MD §2–103 lists these protected statutes). But generally speaking, all nonprofit bylaws include information such as your business’s name and purpose, the processes for amending the bylaws themselves, and the procedure for dissolving the nonprofit.
A few other things that should be covered by your bylaws include:
- How to add new board members
- How to hold board meetings
- How to solve internal conflicts of interest
- How to keep records
- How to compensate directors
- How to respond to emergencies
- How to dissolve the nonprofit
Are nonprofit bylaws legally binding?
Yes! Once your board of directors or incorporators adopt the bylaws, they are legally binding for the nonprofit and all those working on its behalf.
Are nonprofit bylaws public record?
Sometimes. If your nonprofit applies for 501(c)(3) tax-exemption status with the IRS, the application includes a copy of your bylaws. This application (and therefore your bylaws) then become public record.
Do nonprofit bylaws need to be signed?
No. Bylaws are adopted by vote during your first organizational board of directors meeting. No signatures are required to make them binding. However, including signatures can help make sure that everyone is on the same page from the get-go.
Can nonprofit bylaws be changed?
Yes! Your nonprofit will need to amend your bylaws as the organization grows and changes. You should include the process for amending your bylaws in the first initial draft, and then you can update the bylaws as your organization sees fit.
Who adopts nonprofit bylaws?
The incorporators or the board of directors adopts the bylaws at the first organizational meeting. They are legally binding from that point forward!