Bylaws
of
[name of corporation]
(A Texas Nonprofit Corporation)
Article 1
Purpose of Corporation
[Name of corporation] (the “Corporation”) is organized for charitable, religious, scientific, literary, or educational purposes within the meaning of section 501(c)(3) of the Internal Revenue Code of 1986 (the “IRC”) and the Texas Tax Code, section 11.18. In particular, the Corporation’s purpose is to [state the purpose of the entity, copied directly from the certificate of formation].
Article 2
Restrictions and Limitations
Notwithstanding the foregoing or anything to the contrary herein, the Corporation may not do any of the following:
2.1Engage in any activity or take any action prohibited by the applicable provisions of the Texas Business Organizations Code.
2.2Pay any dividend or distribute any part of the income of the Corporation to any members, directors, or officers, except to—
a.pay compensation in a reasonable amount to its members, directors, or officers for services rendered;
b.confer benefits on its members in conformity with its purposes;
c.make distributions of its income to its members on winding up and termination to the extent authorized by chapter 22 of the Texas Business Organizations Code; and
d.make distributions of its income to its members who are nonprofit corporations organized under the Texas Business Organizations Code and who are exempt from income taxation under section 501(a) of the IRC, by being listed under section 501(c)(3) of that code, if—
i.the distributions are made in accordance with the purpose or purposes of the Corporation as stated in the certificate of formation and with the fiduciary responsibilities of the Board of Directors, including the duty to safeguard restricted funds for their intended purposes, and
ii.after the distributions are complete, the Corporation would be able to pay its debts as they become due in the usual course of its activities and its total assets would at least equal the sum of its total liabilities.
2.3Make loans to the Corporation’s directors.
2.4Engage in any activities, except to an insubstantial degree, that are not in furtherance of the purpose or purposes of the Corporation.
2.5Conduct or carry on any activities not permitted to be conducted or carried on by an organization exempt from taxation under section 501(c)(3) of the IRC and its regulations or by an organization to which contributions are deductible under section 170(c)(2) of the IRC and its regulations.
2.6Serve any private interest except if clearly incidental to the public benefit provided by the Corporation.
2.7Allow any of the Corporation’s net earnings to inure to the benefit of any members of the Corporation or any private individual.
2.8Engage in more than an insubstantial degree in the carrying on of propaganda, or otherwise attempting, to influence legislation, or directly or indirectly participating in or intervening in (including the publication or distribution of statements) any political campaign on behalf of any candidate for public office, except as allowed by the IRC and its regulations.
2.9Make distributions at a time and in a manner that would subject it to tax under section 4942 of the IRC.
2.10Engage in any act of self-dealing that would be subject to tax under section 4941 of the IRC.
2.11Retain any excess business holdings that would subject it to tax under section 4943 of the IRC.
2.12Make any investments that would subject it to tax under section 4944 of the IRC.
2.13Make any taxable expenditures that would subject it to tax under section 4945 of the IRC.
2.14Make any grants, distributions, or investments in any place outside of the United States.
Article 3
Offices
3.1Registered Office and Agent. The registered office and registered agent of the Corporation shall be as set forth in the Corporation’s certificate of formation. The registered office or the registered agent may be changed by resolution of the Board of Directors, upon making the appropriate filing with the secretary of state.
a.Acceptance of Appointment. The registered agent shall provide written consent to serve as registered agent pursuant to Texas Business Organizations Code, section 5.201(b). The written consent shall be maintained in the records of the Corporation.
b.Registered Office. The registered office may, but need not, be identical to the principal office of the Corporation in the state of Texas, and the address of the registered office may be changed from time to time by the Board of Directors in accordance with applicable law.
3.2Principal Office. The principal office of the Corporation shall be at [address, city, state], provided that the Board of Directors shall have the power to change the location of the principal office.
3.3Other Offices. The Corporation may also have other offices at such places, within or without the state of Texas, as the Board of Directors may designate, or as the business of the Corporation may require or as may be desirable.
Article 4
Directors
4.1Board of Directors. To the extent not limited or prohibited by law, the certificate of formation, or these bylaws, the powers of the Corporation shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the board of directors of the Corporation (the “Board of Directors” or “Board”), subject to the powers reserved to the members. However, only licensed attorneys shall have the authority to make litigation decisions on legal matters.
4.2Qualifications, Number, Election, and Tenure of Directors. Directors (a) must be at least the age of eighteen; (b) must agree to abide by all federal and state laws and regulations and the policies and procedures of the Corporation (including any code of conduct); and (c) must otherwise meet the other requirements for directors set forth in the Texas Business Organization Code, certificate of formation, and these bylaws.
The number of directors shall be at least five, provided that the number may be increased or decreased from time to time by an amendment to these bylaws or resolution adopted by the Board of Directors, provided that the number of directors may not be decreased to fewer than three. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.
At the first annual meeting of the Board of Directors and at each annual meeting thereafter, the Board of Directors shall have the power to appoint directors for the upcoming calendar year for each vacant position on the Board of Directors. Once appointed, a director shall hold office for two years or until that director’s death, resignation, removal, or retirement as set out in these bylaws.
4.3Acceptance of Appointment. Once appointed by the Board of Directors, the person must first accept the appointment.
4.4Removal. A director may be removed from office, with or without cause, by the Board of Directors, provided that at least a majority of the other directors vote for the removal. If the director was elected to office, removal requires an affirmative vote equal to the vote necessary to elect the director.
4.5Resignation. Any resignation of a director or officer must be in writing. Upon resignation, the director shall no longer be counted toward the quorum or for any other matter for the Corporation.
If the resigning director wishes to rescind the resignation within ten days of having been made, the approval of all the remaining directors at a meeting of the Board of Directors or by a unanimous written consent signed by all the remaining directors shall be required. If the Board of Directors does not meet (or the unanimous written consent is not signed by all remaining directors in lieu of a meeting) within thirty days of the date of the request to rescind resignation, the resignation shall be final.
4.6Vacancies; Increase in Number of Directors. Any vacancy occurring in the Board of Directors shall be filled by the affirmative vote of a majority of the remaining directors (though less than a quorum of the Board of Directors). A director elected to fill a vacancy shall be elected for the unexpired term of the previous director. Any directorship to be filled by reason of an increase in the number of directors shall be filled by election at an annual meeting or at a special meeting of the Board of Directors called for that purpose.
4.7Regular Meetings of Directors. Regular meetings of the Board of Directors may be held with or without notice at such time and place as may be from time to time determined by the Board of Directors.
4.8Special Meetings of Directors. The secretary shall call a special meeting of the Board of Directors whenever requested to do so by the president or by three or more directors. The special meeting shall be held at the date and time specified in the notice of meeting.
4.9Place of Directors’ Meetings. All meetings of the Board of Directors shall be held either at the principal office of the Corporation or at such other place, either within or without the state of Texas, as shall be specified in the notice of meeting or executed waiver of notice.
4.10Notice of Directors’ Meetings. Notice of any special meeting of the Board of Directors shall be given at least one day before the meeting by written notice (by personal delivery, mail, courier, fax, email, or other means approved by the Board of Directors or permitted by law). Any director may waive notice of any meeting. Neither the business to be transacted nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of the meeting, unless specifically required by law or by these bylaws.
4.11Quorum; Voting of Directors. A quorum for the transaction of business by the Board of Directors shall be a majority of the total number of directors fixed by these bylaws and serving at the time. Directors present by proxy may be counted toward a quorum. The act of the majority of the total number of directors fixed by these bylaws and serving at the time present in person or by proxy at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by law or the certificate of formation.
A director may vote in person or by proxy executed in writing by the director. No proxy shall be valid after three months from the date of its execution. Each proxy shall be revocable unless expressly provided therein to be irrevocable or unless otherwise made irrevocable by law.
In case of a tie vote on a particular matter between the directors at a quorate meeting of the Board of Directors, the president of the Corporation shall have a tie-breaking vote (in addition to the president’s original vote (i.e., two votes)) on that matter.
4.12Compensation. Directors, as such, shall not receive any stated salary for their services or for attendance at any meeting of the Board of Directors. A director shall not be precluded from serving the Corporation in any other capacity and receiving compensation for those services.
4.13Action by Directors without Meeting. Any action required by the Texas Business Organizations Code to be taken at a meeting of the Board of Directors, or any action that may be taken at a meeting of the Board of Directors or any committee, may be taken without a meeting if a consent in writing, setting forth the action to be taken, shall be signed by all members of the Board of Directors entitled to vote on the subject matter thereof, or all of the members of the committee, as the case may be. Such consent shall have the same force and effect as a unanimous vote.
If the Corporation’s certificate of formation so provides, any action required by the Texas Business Organizations Code to be taken at a meeting of the Board of Directors or any action that may be taken at a meeting of the Board of Directors or any committee may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed by a sufficient number of members of the Board of Directors or the committee as would be necessary to take that action at a meeting at which all members of the Board of Directors or the committee were present and voted.
Each written consent shall bear the date of signature of each director or committee member who signs the consent. A written consent signed by less than all members of the Board of Directors or the committee is not effective to take the action that is the subject of the consent unless, within sixty days after the date of the earliest dated consent delivered to the Corporation in the manner required by this section, a consent or consents signed by the required number of members of the Board of Directors or the committee is delivered to the Corporation at its registered office, registered agent, principal place of business, transfer agent, registrar, exchange agent, or an officer or agent of the Corporation having custody of the books in which proceedings of meetings of the Board of Directors or committees are recorded. Delivery shall be by hand or certified or registered mail, return receipt requested. Delivery to the Corporation’s principal place of business shall be addressed to the president or principal executive officer of the Corporation.
Prompt notice of the taking of any action by the Board of Directors or a committee without a meeting by less than unanimous written consent shall be given to all members of the Board of Directors or the committee who did not consent in writing to the action.
If any action by the Board of Directors or a committee is taken by written consent signed by less than all members of the Board of Directors or the committee, any articles or documents filed with the secretary of state as a result of taking the action shall state, in lieu of any statement required by this act concerning any vote of the Board of Directors or a committee, that written consent has been given in accordance with the provisions of section 6.202 of the Texas Business Organizations Code and that any written notice required by that section has been given.
A telegram, telex, cablegram, or similar transmission by a director or member of a committee or a photographic, photostatic, facsimile, email, text, or similar reproduction of a writing signed or intended by the director or member to exhibit assent shall be regarded as signed by the director or member for purposes of this section.
4.14Committees of Board of Directors. The Board of Directors, by resolution adopted by a majority of the directors in office, may designate and appoint one or more committees, each of which shall consist of one or more directors, which committees, to the extent provided in the resolution, shall have and exercise the authority of the Board of Directors in the management of the Corporation, except that no such committee shall have the authority of the Board of Directors in reference to amending, altering, or repealing these bylaws; electing, appointing, or removing any member of any such committee or any director or officer of the Corporation; amending or restating the certificate of formation; adopting a plan of merger or adopting a plan of consolidation with another corporation; authorizing the sale, lease, exchange, or mortgage of all or substantially all of the property and assets of the Corporation; authorizing the voluntary dissolution of the Corporation or revoking proceedings therefor; adopting a plan for the distribution of the assets of the Corporation; or amending, altering, or repealing any resolution of the Board of Directors that by its terms provides that it shall not be amended, altered, or repealed by such committee. The designation and appointment of any such committee and the delegation of authority to the committee shall not operate to relieve the Board of Directors, or any individual director, of any responsibility imposed by law on the Board of Directors or on any individual director.
One member of each committee shall be appointed chair by the Board of Directors.
Article 5
Officers
5.1Number of Officers. The officers of the Corporation shall consist of a president, a vice president, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary. New offices may be created and filled at any meeting of the Board of Directors. Any two or more offices may be held by the same person, except the offices of president and secretary. Each of the president, vice president, secretary, and treasurer of the Corporation must also be a member of the Board of Directors.
5.2Election of Officers; Term of Office. All officers shall be elected or appointed annually by a vote of the members in the same manner as the voting for the Board of Directors. Each officer shall be elected for [number] years or until death, retirement, resignation, or removal as set out in these bylaws.
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Include the following if applicable. |
The officer elections shall be staggered every other year. The president and treasurer shall be elected on odd-numbered years, and the secretary and vice president shall be elected on even-numbered years.
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Continue with the following. |
5.3Removal of Officers; Vacancies. Any officer elected or appointed may be removed by a vote of at least a majority of the Board of Directors whenever in their judgment it serves the best interests of the Corporation. The removal of an officer shall be without prejudice to the contract rights, if any, of the officer so removed. Election or appointment of an officer or agent shall not of itself create contract rights. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the Board of Directors for the unexpired portion of the term.
5.4Powers of Officers. Each officer shall have, subject to these bylaws, in addition to the duties and powers specifically set forth herein, such powers and duties as are commonly incident to that office and such duties and powers as the Board of Directors shall from time to time designate. All officers shall perform their duties subject to the directions and under the supervision of the Board of Directors. The president may secure the fidelity of any officers by bond or otherwise.
All officers and agents of the Corporation, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these bylaws, or as may be determined by resolution of the Board of Directors not inconsistent with these bylaws.
In the discharge of a duty imposed or power conferred on an officer of the Corporation, the officer may in good faith and with ordinary care rely on information, opinions, reports, or statements, including financial statements and other financial data, concerning the Corporation or another person, that were prepared or presented by (a) one or more other officers or employees of the Corporation, including members of the Board of Directors, or (b) legal counsel, public accountants, or other persons for matters the officer reasonably believes are within the person’s professional or expert competence.
An officer is not relying in good faith within the meaning of this section if the officer has knowledge concerning the matter in question that makes reliance otherwise permitted by this subsection unwarranted.
5.5President. The president shall be the chief executive officer of the Corporation and shall preside at all meetings of all directors. The president shall see that all orders and resolutions of the Board are carried out, subject, however, to the right of the directors to delegate specific powers, except as may be by statute exclusively conferred on the president, to any other officers of the Corporation.
The president or any vice president shall execute bonds, mortgages, and other instruments requiring a seal in the name of the Corporation. When authorized by the Board, the president or any vice president may affix the seal to any instrument requiring it, and the seal when so affixed shall be attested by the signature of either the secretary or an assistant secretary.
The president shall be ex officio a member of all standing committees.
The president shall submit a report of the operations of the Corporation for the year to the directors at their meeting next preceding the annual meeting of the Board of Directors.
5.6Vice President. If so appointed, the vice president shall, in the absence or disability of the president, perform the duties and exercise the powers of the president, be responsible for liaising with and instructing any Board committees and reporting on their projects and discussions to the larger Board of Directors at any Board meeting, and perform such other duties as the Board of Directors shall prescribe.
5.7Secretary; Assistant Secretaries. The secretary shall attend all meetings of the Board of Directors, shall record all votes and the minutes of all proceedings, and shall perform like duties for the standing committees when required. The secretary shall give or cause to be given notice of all meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Board of Directors. The secretary shall keep in safe custody the seal of the Corporation, and when authorized by the Board of Directors, affix the seal to any instrument requiring it, and when so affixed, the seal shall be attested by the secretary’s signature or by the signature of an assistant secretary.
The assistant secretaries shall in order of their rank as fixed by the Board of Directors, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary, and they shall perform such other duties as the Board of Directors shall prescribe.
In the absence of the secretary or an assistant secretary, the minutes of all meetings of the Board shall be recorded by a person designated by the president or by the Board of Directors.
5.8Treasurer; Assistant Treasurers. The treasurer shall have the custody of the corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.
The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for those disbursements. The treasurer shall keep and maintain the Corporation’s books of account; shall render to the president and directors an account of all the treasurer’s transactions and of the financial condition of the Corporation; and shall exhibit the books, records, and accounts to the president or directors at any time. The treasurer shall disburse funds for capital expenditures as authorized by the Board of Directors and in accordance with the orders of the president, and present to the president’s attention any requests for disbursing funds if in the judgment of the treasurer any such request is not properly authorized. The treasurer shall perform such other duties as may be directed by the Board of Directors or by the president.
If required by the Board of Directors, the treasurer shall give the Corporation a bond in a sum and with a surety or sureties satisfactory to the Board of Directors for the faithful performance of the duties of the office and for the restoration to the Corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the incumbent’s possession or under the incumbent’s control belonging to the Corporation.
The assistant treasurers in the order of their seniority shall, in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer, and they shall perform such other duties as the Board of Directors shall prescribe.
Article 6
Indemnification and Insurance
6.1Indemnification. The Corporation shall have the full power to indemnify and advance or reimburse expenses pursuant to the provisions of the Texas Business Organizations Code to any person entitled to indemnification under the provisions of the Texas Business Organizations Code.
6.2Insurance. The Corporation may purchase and maintain insurance or another arrangement on behalf of any person who is or was a member, director, officer, employee, or agent of the Corporation or who is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, employee benefit plan, other enterprise, or other entity, against any liability asserted against and incurred by that person in such a capacity or arising out of the status as such a person, whether or not the Corporation would have the power to indemnify the person against that liability. Without limiting the power of the Corporation to procure or maintain any kind of insurance or other arrangement, the Corporation may, for the benefit of persons indemnified by the Corporation, (a) create a trust fund; (b) establish any form of self-insurance; (c) secure its indemnity obligation by grant of a security interest or other lien on the assets of the Corporation; or (d) establish a letter of credit, guaranty, or surety arrangement. The insurance or other arrangement may be procured, maintained, or established within the Corporation or with any insurer or other person deemed appropriate by the Board of Directors regardless of whether all or part of the stock or other securities of the insurer or other person are owned in whole or part by the Corporation. In the absence of fraud, the judgment of the Board of Directors on the terms and conditions of the insurance or other arrangement and the identity of the insurer or other person participating in an arrangement shall be conclusive, and the insurance or arrangement shall not be voidable and shall not subject the directors approving the insurance or arrangement to liability on any ground, regardless of whether directors participating in the approval are beneficiaries of the insurance or arrangement.
Article 7
Miscellaneous
7.1Waiver of Notice. Whenever any notice is required to be given to any member or director of the Corporation under the provisions of the Texas Business Organizations Code, the certificate of formation, or these bylaws, a waiver thereof in writing signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be equivalent to the giving of the notice. The attendance of a director, officer, or member at any meeting shall constitute a waiver of notice of the meeting, except where a director, officer, or member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.
7.2Meetings by Telephone Conference or Other Electronic or Remote Communications Technology. Subject to the provisions required or permitted by the Texas Business Organizations Code and these bylaws for notice of meetings, members of the Board of Directors or any committee may participate in and hold a meeting of the Board or committee by means of conference telephone or another suitable electronic communications system, including videoconferencing technology or the Internet, but only if each member entitled to participate in the meeting consents to the meeting being held by means of that system and the system provides access to the meeting in a manner or using a method by which each member participating in the meeting can communicate concurrently with each other participant. Participation in a meeting pursuant to this section shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
7.3Seal. The Corporation may adopt a corporate seal in such form as the Board of Directors may determine. The Corporation shall not be required to use the corporate seal, and the lack of the corporate seal shall not affect an otherwise valid contract or other instrument executed by the Corporation.
7.4Contracts. The Board of Directors may authorize any officer or agent of the Corporation, in addition to the officers authorized by these bylaws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and the authority may be general or confined to specific instances. The treasurer, upon approval of a majority of the Board, may promulgate enforceable spending limits or allowances for committee chairs and officers.
7.5Gifts. The Board of Directors may accept on behalf of the Corporation any contribution, gift, bequest, or devise for the general purposes or for any special purpose of the Corporation.
7.6Books and Records. The Corporation shall keep correct and complete books and records of account, shall keep minutes of the proceedings of the Board of Directors and committees, and shall keep at the registered office or principal office in this state a record of the names and addresses of its members entitled to vote. A director of the Corporation, on written demand stating the purpose of the demand, has the right to examine and copy, in person or by agent, accountant, or attorney, at any reasonable time, for any proper purpose, the books and records of the Corporation relevant to that purpose, at the expense of the member.
7.7Financial Records; Annual Reports. The Corporation shall maintain current true and accurate financial records with full and correct entries made for all financial transactions of the Corporation, including all income and expenditures, in accordance with generally accepted accounting practices. All records, books, and annual reports (if required by law) of the financial activity of the Corporation shall be kept at the registered office or principal office of the Corporation in this state for at least three years after the closing of each fiscal year and shall be available to the public for inspection and copying there during normal business hours. The Corporation may charge for the reasonable expense of preparing a copy of a record or report.
7.8Fiscal Year. The fiscal year of the Corporation shall be from January 1 to December 31 of each calendar year or as otherwise determined by the Board of Directors, except the first and last fiscal years of the Corporation.
7.9Dispute Resolution. Recognizing that litigation incurs significant costs and time and that certain disputes are not properly decided by a court of law under the U.S. and Texas Constitutions, it is the stated and express desire of the Corporation to resolve any disputes arising between directors or officers and either the Corporation, other directors and officers, or both, as it relates to any matter involving the governance, control of assets, operations and administration, and employment decisions of the Corporation, first by mediation. If mediation does not resolve the relevant dispute or the dispute remains for more than forty days after commencement of mediation by any party, then each of the parties to the dispute shall submit to binding arbitration under the auspices of the American Arbitration Association upon the request of any party thereto. Any such arbitration shall be held in [county] County, Texas, or contiguous counties (as decided by the arbitrator). There shall be one arbitrator for disputes with no injunctive relief and for demands less than $1 million and three arbitrators for any dispute involving injunctive relief or demands $1 million or more. Each party shall bear their own costs and expenses, and the costs of the arbitrators shall be split equally between the parties. Arbitrators shall provide awards in writing with conclusions of facts and law, and the awards shall be final and binding on the parties.
Article 8
Amendment of Bylaws
The Board of Directors may amend or repeal these bylaws, or adopt new bylaws, unless the certificate of formation or the Texas Business Organizations Code limits such powers, with an affirmative vote of at least a majority of the members of the Board of Directors fixed by these bylaws and then serving.
Article 9
Construction
9.1Pronouns; Headings. All personal pronouns used in these bylaws shall include all genders, whether used in masculine, feminine, or neuter gender, and the singular shall include the plural whenever and as often as may be appropriate. All headings herein are for convenience only and neither limit nor amplify the provisions of these bylaws.
9.2Invalid Provisions. If any provision of these bylaws, or the applicability of any such provision to a specific situation, shall be held invalid or unenforceable, the provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of these bylaws and all other applications of any such provision shall not be affected thereby.
Initial bylaws adopted by the Board of Directors with effect from [date].
I certify the above is a true and correct copy of the bylaws adopted by the Board of Directors of the Corporation.
[Name of secretary], Secretary and Director
of the Corporation
Date: