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Nonprofit Bylaws (501(c)(3)) review

Bylaws of a 501(c)(3) tax-exempt nonprofit corporation.

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What it checks

501(c)(3) exempt purpose recital

Nonprofit bylaws should recite the § 501(c)(3) exempt purposes (charitable, religious, educational, scientific, etc.).

Critical · GOV-071

Inurement prohibition

Bylaws customarily recite the prohibition on inurement of net earnings to private individuals (IRC § 501(c)(3); Treas. Reg. § 1.501(c)(3)-1(c)(2)).

Critical · GOV-072

Political-activity prohibition

Bylaws customarily recite the prohibition on political-campaign participation and the limit on lobbying (IRC § 501(c)(3)).

Critical · GOV-073

Dissolution clause (assets distributed to 501(c)(3))

Dissolution clause must require distribution of remaining assets to another § 501(c)(3) organization (Treas. Reg. § 1.501(c)(3)-1(b)(4)).

Critical · GOV-074

Conflict-of-interest policy

IRS Form 990 governance section asks whether a written conflict-of-interest policy exists.

Critical · GOV-075

Board composition and quorum

Nonprofit bylaws must specify board composition and quorum.

Critical · GOV-076

Member vs. non-member structure

Bylaws should specify whether the nonprofit has voting members.

Warning · GOV-077

Annual meeting / required meetings

Bylaws must specify annual / regular board meetings.

Warning · GOV-078

Indemnification of directors and officers

Bylaws should provide for indemnification of directors and officers.

Critical · GOV-079

Three-pillar 501(c)(3) charter recitals present (inurement + political + dissolution)

The § 501(c)(3) organizational test (Treas. Reg. § 1.501(c)(3)-1(b)) looks to the articles: an exempt-purpose limitation, no non-exempt powers, and a dissolution-to-exempt-organization clause. Inurement / political prohibitions are operational requirements customarily recited alongside them.

Critical · GOV-080

Every run also applies 104 general checks that belong to any agreement: structure, parties and signatures, defined terms, cross-references, dates, amounts, and one-sided terms.

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