Chicago Nonprofit Bylaws Attorney

Nonprofit bylaws form the entire backbone of governance and structure for nonprofit organizations. The importance of your organization’s bylaws cannot be overstated, as in cases of member disputes, concerns about the director or staff, voting issues, or other complications, referring to the bylaws can ensure that the nonprofit is operating under Illinois law while accommodating the organization’s practices. Diligent bylaw drafting and review is essential to lawful compliance as well as nonprofit structuring, and a Chicago nonprofit bylaws attorney can help ensure flexible, accommodating, and law-abiding bylaws.

With the aid of James C. Provenza & Associates, PC in Chicago, your nonprofit’s bylaws will accurately reflect state and federal law as well as your organization’s practices. Furthermore, by eliminating inefficient guesswork when a dispute arises, a trait common among ineffective nonprofits, Attorney James C. Provenza can help establish good governance so that your nonprofit thrives.

Understanding Bylaws in Illinois

Under Article I of the General Not For Profit Corporation Act of 1986 (805 ILCS 105/), the term “bylaws” refers to the “the code or codes of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated.”

In other words, the bylaws form an overarching guide and set of rules that dictate how disputes should be resolved, and their regulations cannot be restrained by, say, the director of the nonprofit to suit his or her personal interests. The General Not For Profit Corporation Act of 1986 contains any regulations not addressed by the bylaws, such as specifications for a quorum for a director or member vote. For default regulations, such as the quorum mentioned, the nonprofit’s bylaws can override these rules and enact specific provisions specific to the organization, such as lowering the quorum for a membership vote. Contrarily, bylaws cannot permit practices that are prohibited by General Not For Profit Corporation Act, such as the payment of dividends or shares (805 ILCS 105/106.05).

Issues to Consider When Drafting Bylaws

Due to the importance of bylaws for a nonprofit, and the large role that the bylaws have over the performance and structure of the organization, they need to be carefully drafted to ensure that most possibilities for disputes are considered. For more than 20 years, and as part of the Association of Consultants to Nonprofits-Legal Services, Chicago attorney James C. Provenza can assure that your bylaws will not overlook any significant areas. Some of the pressing issues considered in the bylaws should include:

• Directors: Illinois statutes requires a minimum of three board members, but the range of possible board members cannot be five more than the smallest number. Therefore, the bylaws will address this range, such as between 5 and 10 board members, but not 5 and 15. Other issues include the election process for board members, director term limits, restrictions on who can be a director, and how to remove a director.
• Meetings: The bylaws will determine how often the directors should meet, the number of directors required to call a special meeting, the quorum, and how many days of advance notice is required prior to a meeting.
• Officers: The bylaws will determine the official titles of the board directors, who elects officers, the term limits for officer positions, and how an officer can be removed.

It is important to note that many of the issues covered in bylaws are default according to Illinois state law, but unless the action is specifically prohibited, the bylaws can amend those defaults to create new provisions for the nonprofit.

Problems to Avoid When Drafting or Reviewing Bylaws

Failure to effectively and cohesively draft and review bylaws could expose the nonprofit to fines or other consequences for compromising Illinois statutes, but more commonly, ineffective bylaws expose major flaws in the organization’s structuring. Some common problems to avoid when drafting or reviewing bylaws include:

• Failure to address all foreseeable scenarios
• Creating a bylaw committee that does not reflect the organization’s population
• Coordinating actions of the bylaw committee without expert legal advice
• Outdated bylaws
• Inflexible bylaws
• Outdated purposes clauses
• Ineffective approval processes
• And many others…

Contact James C. Provenza & Associates, PC Today!

At James C. Provenza & Associates, PC, we boast over 20 years of experience helping some of major nonprofits in and around the Chicago area. We understand the critical importance of drafting and reviewing the organization’s bylaws, and through comprehensive knowledge of Illinois nonprofit law as well as best practices for growing nonprofits, Attorney James C. Provenza will eliminate oversight and ensure effective and functional bylaws. Feel free to contact our office at (847) 729-3939, Monday through Friday. We are also available after hours by appointment.