Puerto Rico Nonprofit Bylaws
Bylaws define your Puerto Rico nonprofit’s internal operating procedures. The rules laid out in your bylaws guide your board through routine activities such as voting, keeping records, and managing members. Bylaws also help your board make decisions in challenging situations like dealing with conflicts of interest and emergencies. Creating your bylaws is an essential part of your nonprofit’s formation process, mainly because your bylaws help ensure that your organization runs well.
Start drafting strong bylaws today with our attorney-provided nonprofit bylaws template.
Why does a Puerto Rico nonprofit need bylaws?
Filing your nonprofit bylaws with the Puerto Rico Department of State isn’t required like it is for your Certificate of Incorporation, but that doesn’t mean you should take drafting your bylaws lightly. Your bylaws are the primary governing document for your nonprofit and will likely become public record. Let’s go over the main reasons your nonprofit bylaws are so important.
1. Adopting nonprofit bylaws is standard practice in Puerto Rico.
Puerto Rico doesn’t mandate nonprofits to adopt bylaws—14 LPRA § 3508 states that bylaws “may be adopted.” However, adopting bylaws is treated as standard practice throughout Puerto Rico’s General Corporations Act. For example, 14 LPRA § 3507 lists one of the purposes of a nonprofit’s first meeting as “to adopt the bylaws.”
2. Third parties will ask to see your bylaws.
It’s pretty common for third parties such as banks and partnering organizations to ask to see your bylaws. For example, you’ll need to send a copy of your bylaws to the IRS when applying for tax-exempt status. You may also need to show your bylaws to an investor before they provide your nonprofit with funds or to a landlord before they allow you to rent offices.
3. Nonprofit bylaws allow you more control over your nonprofit.
Your nonprofit bylaws allow you to maintain control over your nonprofit in two main ways. First, in the absence of bylaws, your nonprofit will be governed by the general rules laid out in Puerto Rico’s default nonprofit statutes, which may not work well for your nonprofit. Second, not having bylaws can make your nonprofit vulnerable to legal issues. For example, if your members disagree over unclear procedure, your nonprofit could end up facing a legal dispute. Disputes can lead to legal action against your organization or even a government investigation of your nonprofit. Adopting comprehensive bylaws helps keep your nonprofit independent and safeguards against legal complications.
Want to learn more? Check out our Guide to Nonprofits.
What do Puerto Rico Nonprofit Bylaws include?
As the main internal document for any Puerto Rico corporation, bylaws should include basic facts about your organization and specific rules for governing it. So, in addition to information such as your nonprofit’s name, address, and purpose, your bylaws should contain detailed instructions for:
- adding or removing board members
- giving notice and holding board meetings
- voting and meeting quorum requirements
- handling conflicts of interest
- compensating directors
- keeping records
- amending the bylaws
- operating during emergencies
- dissolving the nonprofit
Your bylaws can include additional provisions so long as they aren’t inconsistent with the law or your Certificate of Incorporation.
Are nonprofit bylaws legally binding?
Yes. Your nonprofit bylaws are legally binding and can be used in court to hold members of your organization liable for violating rules. If an employee, officer, or director acts in bad faith against your nonprofit, there could be serious legal ramifications.
Are nonprofit bylaws public record?
Sometimes. Since you aren’t required to file nonprofit bylaws with the Puerto Rico Department of State, it’s possible to keep your bylaws off public record. However, if you plan to apply for 501(c)(3) tax-exempt status, you’ll need to attach a copy of your bylaws to your application, and the IRS makes all applications public. You may also choose to make your nonprofit bylaws public. Many nonprofits publish their bylaws in a gesture of transparency to gain the trust of their donors and the community at large.
Do nonprofit bylaws need to be signed?
Technically, no. Your board of directors isn’t legally obligated to sign your nonprofit bylaws in Puerto Rico, but having your board’s signatures is preferable. Your board’s signatures give your bylaws an air of authority and signal that your board is of one mind regarding your nonprofit.
Can nonprofit bylaws be changed?
Yes. When you draft your bylaws, you should include provisions for how to make amendments. This will help your board get through the amendment process without any hiccups. We recommend reviewing your bylaws regularly to ensure they stay up-to-date.
Who adopts nonprofit bylaws?
Your incorporators or board of directors adopt your bylaws, typically at your nonprofit’s first organizational meeting.