Not-for-Profit Incorporation

Not-for-Profit bylaws should streamline governance, not complicate it. Too often, Non-profits include provisions in their bylaws that are old-fashioned and needlessly complex, and which typically lead to conflict and litigation, instead of providing a stable governance blueprint.

Canadian Non-profits should leave out the following provisions from their bylaws:

• Processes and Procedures that are Ignored:  If the processes and procedures called for in the Bylaws are not followed (these typically include specific timelines for meetings, reports and notices), those who want to pick a bone with the Board will  find a way to challenge the board's decisions based on a technicality.

• Information that Will Change Frequently.  You don't want to be constantly amending your bylaws, so information which changes frequently should be omitted from NFP bylaws. Staff job descriptions, detailed committee charters, rules for conducting the annual meeting, guidelines for fundraisers, etc. are better suited for board resolutions.

• Roberts Rules of Order. Roberts Rules of Order are, to put it bluntly, anachronistic and are misunderstood even by most lawyers. Best to leave out all reference to Roberts Rules. Requiring adherence to the rules opens the organization to challenges to Board actions based on technicalities. Best to leave it out.

• Detailed Overviews of the Organization's Mandate and Activities: A Not-for-Profit's purpose should be relegated to its Articles of Incorporation and be kept as broad as possible, so as not to limit its activities as they evolve.

• Due Process Provisions for Removing Directors, Officers, or Members. We advise our clients that it is generally in the nonprofit's best interest to have the ability to remove the problematic individual without cause. Otherise, due process can create hurdles that the person in question could use against the organization.

When tension develops between various interests on the board, or between the board and the members, the first place the lawyers and court will look will be the Not-for-Profits' bylaws.

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