Bylaws and the First Meeting

Bylaws are the rulebook a group reaches for when it disagrees. Most of the time nobody reads them. Then a director wants to remove the chair, or two factions claim to be the real board, or a donor asks who approved a contract, and the bylaws decide the outcome. Writing them carefully at the start is cheap. Fixing a gap in the middle of a fight is not. This lesson assumes the articles are filed (lesson 2). Directors' legal duties and conflict-of-interest votes get their own treatment in lesson 6.

What bylaws are, under Idaho law

Under Idaho Code 30-30-206, the board or the members adopt the initial bylaws, and the bylaws "may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with law or the articles." Bylaws are not filed with the Secretary of State. They are filed with the IRS when a group applies for 501(c)(3) status; the Form 1023 instructions say to upload a current copy with amendments, and that bylaws need not be signed unless they serve as the organizing document.

The order of authority runs from the top down: the statute, then the articles, then the bylaws, then board resolutions and policies. A bylaw that conflicts with a mandatory part of Chapter 30 is void to that extent. But most of the act's governance rules begin with "unless the articles or bylaws provide otherwise," and those are the levers a group can pull.

The board: defaults and limits

The board manages the corporation. Under 30-30-601, all corporate powers are exercised by or under its authority unless the articles hand some of them to another person. The table sets out the rules a group most often needs:

Topic	Idaho default rule	Can bylaws change it?	Section
Number of directors	Set by articles or bylaws	Yes, but never fewer than 3 (1 for a religious corporation)	30-30-603
Term	1 year if not specified	Yes, up to 5 years for elected directors; successive terms allowed	30-30-605
Staggered terms	Not required	Yes, groups may be staggered	30-30-606
Who elects directors (no members)	The board	Yes, articles or bylaws may set another method	30-30-604(2)
Regular meetings	No notice needed	Yes	30-30-614(1)
Special meetings	At least 2 days' notice of date, time and place (not purpose)	Yes	30-30-614(2)
Removing a director or acting on a "member" matter in a memberless corporation	7 days' written notice to every director	No, unless waived	30-30-614(3)
Who may call a meeting	Presiding officer, president or 20 percent of directors	Yes	30-30-614(4)
Quorum	Majority of directors in office	Yes, but not below the greater of 1/3 of directors or 2	30-30-616(1)
Vote needed	Majority of directors present, if a quorum is present	Yes, may require more	30-30-616(2)
Meeting by phone or video	Allowed if everyone can hear each other at once	Yes, may limit it	30-30-612(3)
Action without meeting	Written consent signed by all directors	Yes	30-30-613
Removing a board-elected director without cause	Two-thirds of directors in office	Yes, may require more	30-30-608(8)
Removal for missed meetings	Only if the rule is in place when the term starts; majority vote	Yes	30-30-608(9)
Filling vacancies	Members, if any, or the board	Yes	30-30-610
Paying directors	Board may set compensation	Yes, may prohibit it	30-30-611
Committees	Board may create them with 2 or more directors	Yes, within limits	30-30-617

Some details matter more than they look. Under 30-30-605(4), a director whose term expires keeps serving until a successor is chosen, so a group that forgets to hold elections is not left without a board. A director may resign at any time by written notice (30-30-607). And under 30-30-615, a director's attendance waives notice unless the director objects at the start; written waivers go with the minutes.

Committees have hard limits. Under 30-30-617(5), a board committee may not authorize distributions, approve dissolution, merger or the sale of substantially all assets, elect or remove directors, or amend the articles or bylaws. Those stay with the full board. A committee's action also does not by itself satisfy the directors' duty of care (30-30-617(6)).

Officers

Unless the articles or bylaws say otherwise, 30-30-621 requires a president, a secretary and a treasurer, plus any others the board appoints. Two or more offices may be held by one person, except that one person may not be both president and secretary (religious corporations excepted). The bylaws or board must assign one officer to prepare minutes and authenticate records. Each officer's authority comes from the bylaws or a board resolution (30-30-622), so write down who may sign checks, contracts and government filings. Officers have their own standard of conduct (30-30-623), covered in lesson 6.

Members: meetings, notice and votes

A group without voting members can skip most of this section. A group with members needs to plan for it, because members' rights are where the act is most detailed and where disputes end up in district court (30-30-503 lets a member ask a court to order a meeting the board failed to hold).

Topic	Idaho default rule	Section
Annual meeting	Required each year; president and chief financial officer report on activities and finances	30-30-501
Special meeting by members	Called on written demand of 10 percent of the voting power; if notice is not given within 30 days, signers may call it	30-30-502
Notice	10 to 60 days before (30 days if mailed by other than first class or registered mail); special meeting notice states purpose	30-30-505
Quorum	10 percent of the votes, counting proxies, mailed and absentee ballots, and remote participation the board authorizes	30-30-511
Votes needed	Majority of votes cast, which must also be a majority of the required quorum	30-30-512
One member, one vote	Unless the articles or bylaws say otherwise	30-30-510
Written ballot instead of meeting	Allowed; ballots must state the quorum and approval needed and a deadline	30-30-508
Written consent without meeting	Members holding 80 percent of the voting power must sign; notice to the rest, effective 10 days later	30-30-504
Proxies	Allowed unless prohibited; valid 11 months unless stated, never over 3 years	30-30-513
Expelling a member	Fair and reasonable procedure, such as 15 days' written notice and a chance to be heard at least 5 days before	30-30-409
Removing a member-elected director	Only at a meeting called for that purpose, with notice saying so	30-30-608(5)

Two traps show up often. First, under 30-30-511(4), unless one-third of the voting power takes part, members at an annual or regular meeting may vote only on matters described in the notice. A small turnout cannot spring a surprise vote. Second, the quorum and vote rules interact: a bylaw that raises the member quorum must itself be approved by the members, while the board may lower it unless the bylaws forbid (30-30-511(2) and (3)).

Remote participation: a 2021 change

Before 2021, Idaho law let directors of nonprofits meet remotely but said nothing equivalent for members. House Bill 103, from the House Business Committee, fixed that. Its statement of purpose says it lets members of a nonprofit corporation "participate in meetings by remote communication to the extent authorized by the board of directors." It passed the House 69 to 0 and the Senate 35 to 0, was signed April 13, 2021, and took effect July 1, 2021 as Session Laws chapter 191. The words now sit in 30-30-511. The practical point: member remote participation counts toward quorum only "to the extent authorized by the board," so the board should adopt that authorization by resolution or bylaw before the first online annual meeting.

A sample bylaw outline

No form is required. This outline follows the topics the act addresses and the questions the IRS asks. Groups without members drop article 3 and fold its election rules into article 4.

Article	What it covers	Idaho sections to check
1. Name, office, purpose	Legal name, principal office, purpose matching the articles, fiscal year	30-30-202
2. Nonprofit and tax limits	No private benefit; for a 501(c)(3), no campaign intervention and limited lobbying; dissolution per the articles	30-30-904; articles
3. Members (if any)	Who qualifies, dues, classes, voting, annual and special meetings, notice, quorum, ballots, proxies, remote participation, resignation and expulsion	30-30-401 to 412; 501 to 517
4. Board of directors	Number, qualifications, election, terms and staggering, resignation, removal, vacancies, pay	30-30-601 to 611
5. Board meetings	Regular and special meetings, notice, waivers, quorum, voting, remote meetings, written consent	30-30-612 to 616
6. Committees	Executive, finance, nominating; their powers and limits	30-30-617
7. Officers	Titles, duties, election, terms, removal, signing authority	30-30-621 to 625
8. Conflicts of interest	Disclosure and approval rules, or a cross-reference to the board's policy	30-30-619
9. Indemnification and insurance	When the group pays a director's legal costs; insurance	30-30-626
10. Finances	Bank accounts, check signers, budget approval, review or audit	30-30-1101(2); 30-30-1105
11. Records and inspection	Minutes, member list, who keeps them, how requests are handled	30-30-1101 to 1104
12. Emergency bylaws	Meeting and quorum rules if a catastrophe prevents a quorum	30-30-207
13. Parliamentary authority	A rulebook such as Robert's Rules, or a simpler one, for procedure the bylaws do not cover	None; Chapter 30 names no rulebook
14. Amendments	Who amends, notice, vote required	30-30-708 to 710

Amending the bylaws

The amendment rule depends on whether the group has members. In a memberless corporation, 30-30-708 lets the board amend the bylaws by a majority of directors in office, after notice under 30-30-614(3) (seven days' written notice) that says the meeting will consider an amendment and includes a copy or summary. With members, 30-30-709 by default requires approval by a simple majority of the board and by members, by majority of votes cast or of the voting power, whichever is less, with written notice and a copy or summary of the amendment. The bylaws can change those defaults, and the board may condition its own proposal on a higher vote.

The organizational meeting

Under 30-30-205, after the articles are filed, the initial directors named in them hold an organizational meeting, called by a majority of them, "to complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business." It may be held in or out of Idaho, under the same rules as other board meetings, so a video meeting works. If the articles named no directors, the incorporators meet first to elect them, and they may act by unanimous written consent instead of meeting.

Minutes, resolutions and records

Idaho Code 30-30-1101 makes minutes of all member and board meetings, records of actions taken without a meeting, and records of committee actions taken with board authority into permanent records. The corporation must also keep accounting records and a member list by class, and keep at its principal office copies of the articles and bylaws, member-related board resolutions, three years of member meeting minutes, seven years of written communications to members and financial statements, a list of current directors and officers, and its latest annual report. Records may be electronic if they can be printed in a reasonable time.

The IRS cares about timing as much as content. Form 990, Part VI, line 8 asks whether every board and committee meeting and written action was "contemporaneously documented." The Form 990 instructions define contemporaneous as by the later of the next meeting or 60 days after the meeting or action, and allow approved minutes, email or similar writings that show the action, when it was taken and who decided.

The policies the IRS asks about

Federal law does not require most governance policies. The IRS asks about them anyway, on public forms, and says in the Form 990 instructions that it considers such policies to "generally improve tax compliance." A group that answers "No" across Part VI is telling every donor and reporter who reads its 990 that it has none.

Form and line	What it asks	What to adopt
990 Part VI, line 1	Number of voting board members, and how many are independent	A board with independent members
990 Part VI, line 8	Were all board and committee actions documented contemporaneously?	The minutes habit above
990 Part VI, line 11	Did the board get a copy of the 990 before filing, and how was it reviewed?	A rule that the board sees the 990 before it is filed
990 Part VI, line 12a to 12c	Written conflict of interest policy; annual disclosure; regular monitoring	A conflict policy with yearly signed disclosures (lesson 6)
990 Part VI, line 13	Written whistleblower policy	A policy naming who receives reports and barring retaliation
990 Part VI, line 14	Written document retention and destruction policy	A retention schedule (lesson 10)
990 Part VI, line 15	Process for setting pay of top officials, including comparability data and contemporaneous records	A pay-setting procedure (lesson 6)
990 Part VI, line 19	Whether governing documents, conflict policy and financials are public, and how	A decision to post them
1023 Part V, lines 1 to 2	How officers and directors are paid and whether the group has a conflict policy; Appendix A holds a sample policy	The same conflict policy and pay procedure
1023 Part V, lines 4 to 8	Business dealings with insiders, leases, contracts, joint ventures	Arm's-length terms and board approval with conflicted members out of the vote

Source: Instructions for Form 990 and Instructions for Form 1023.

The 1023 instructions are blunt about the conflict policy: adopting one "isn't required to obtain tax-exempt status," but the sample in Appendix A helps directors spot situations where insiders could benefit. The federal Sarbanes-Oxley Act mostly does not reach nonprofits, but the Form 990 instructions point out that two of its criminal provisions do: retaliation against whistleblowers who report federal offenses, and destroying records to obstruct a federal investigation (18 U.S.C. 1513(e) and 1519). That is the best argument for adopting whistleblower and retention policies even in a tiny group.

Hard questions

Should a citizens' group give its supporters legal voting rights?

There is a real trade-off. Voting members make the group accountable to its base and harder for a small clique to capture. They also make it easier to capture by a sudden wave of new "members" recruited by opponents, which is why many membership groups set a waiting period or dues before new members can vote. Members also bring notice, quorum and records duties. A memberless board is simpler and more stable, but the board answers only to itself. Some groups split the difference: a memberless corporation with an advisory council of supporters that has no legal vote.

Why bother with policies the IRS does not require?

Because the 990 is public and the answers are printed for all to read, and because the policies are cheap insurance. A conflict policy is the main defense if the IRS or the Attorney General later questions a deal with a director, and the intermediate sanctions rules in lesson 6 reward boards that followed a written process.