Q&A #112 – Can a chairperson unilaterally suspend a nonprofit organization’s Bylaws?
Question: My nonprofit organization recently had a change in leadership. The new chairperson announced that he wants to restructure the organization and has decided to “suspend” the current Bylaws for a period of time until new Bylaws are drafted and instituted. Is a chairperson permitted to unilaterally suspend the Bylaws?
Answer: As discussed in Q&A #49, a nonprofit organization’s Bylaws generally cannot be “suspended,” but rather must follow the formal process for “amendment” set forth in the Bylaws themselves, the organization’s Articles of Incorporation, and the applicable state nonprofit corporation statute. It is possible, but extremely unlikely, that state law and your organization’s governing documents would permit the Bylaws to be amended unilaterally by the chairperson.
As with all questions of nonprofit corporate governance, you must first look to the Articles of Incorporation. To the extent the Articles address the process for amending the Bylaws, these provisions of the Articles must be followed. Next, you must look to the Bylaws, which are more likely to have provisions addressing how Bylaws are amended (the Bylaws cannot be inconsistent with the Articles, but they can elaborate on matters not addressed in the Articles). Lastly, you must check the applicable state nonprofit corporation statute (which is usually the state in which the organization was incorporated), as it may be possible that the Bylaws have been drafted in a way that is not consistent with the law.
It is possible in some jurisdictions to reserve the authority to amend the Bylaws to a single person if this is specifically set forth in the organization’s Articles of Incorporation and/or Bylaws. But it is unusual for a nonprofit organization to be structured this way, as the power to amend the Bylaws is typically held by the Board of Directors as a whole, and/or the voting members in the case of a membership organization. Further, the public perception of a single person taking an action like amending a nonprofit organization’s Bylaws tends to be quite negative.
Planning Tip – If you serve on the Board of Directors of a nonprofit organization (or are a voting member of a membership organization) and you believe the organization’s leadership has exceeded its authority, your first step should be to research your rights to call a meeting and have a vote on the matter. Again, this is determined by the organization’s Articles of Incorporation Bylaws, and the applicable state nonprofit corporation statute. Even if your attempt is rebuffed, it will be important to document that you made the effort in the event the dispute ends up in a court action.
Regardless of your organization’s process for amending the Bylaws, it is almost certainly improper for the Bylaws to be “suspended” in their entirety. The existing Bylaws are binding on the organization and must be followed until properly amended. To the extent permitted by the Articles of Incorporation and applicable law, the amendment could, in theory, replace the existing Bylaws with an extremely minimal statement of the organization’s governing rules. However, it would be more prudent to retain the existing Bylaws until a fully thought-out and carefully drafted set of amended Bylaws has been prepared and duly adopted.
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