What are bylaws?
Incorporated organizations must have at least two types of governing documents:
- letters patent (now called “articles of incorporation” under the ONCA)
Most incorporated organizations also develop:
- policies and operating procedures
These three types of governing documents differ in terms of:
- the type of information they contain
- who can access them
- how easy they are to change
This table summarizes the differences between the three documents in these three areas:
|ARTICLES||BYLAWS||POLICIES & PROCEDURES|
|What they contain||Your articles must contain your organization’s name, its purpose, and the location of its head office. It’s not clear what else will be included in articles until the forms and regulations for the ONCA are published. However, the ONCA legislation says the number of directors will now be in the articles. Before, this was in your bylaws.||Under the ONCA, your bylaws must define the conditions of membership in your organization. They may contain other rules, as long as those rules don’t override the rights and responsibilities required by the ONCA. To help you draft new bylaws, see tips for adjusting existing bylaws and a sample bylaw with options.||Policies explain how your organization handles certain operational issues, such as hiring procedures, privacy, and dress codes. Operating procedures are less formal and are usually developed by staff. The ONCA does not require you to develop any policies. However, some other laws may require you to have policies on certain issues (e.g., the Occupational Health and Safety Act).|
|Who can access them||You must file articles, and any changes to them (called “supplementary articles”), with Service Ontario and make them available to your directors and members.||You do not have to file your bylaws with Service Ontario, but you must make them available to your directors and members.||Whether your policies and procedures are internal documents or available to the public is up to you.|
|How to change them||Articles are difficult and expensive to change. Two-thirds of members voting at a members meeting must approve any changes. You have to pay to file changes with Service Ontario. If you are a charity, the Ontario Public Guardian and Trustee and the Canada Revenue Agency must also approve changes to your articles. Changing your articles could put your charitable status at risk.||Bylaws are easier and less expensive to change, compared to changing articles. A majority of members voting at a members meeting can approve any changes, and you don’t need to submit them for approval to outside agencies. Your directors may also change your bylaws and have the changes ratified later by members, unless your bylaws state otherwise.||Your board or senior management staff develop your policies and have the sole discretion to change them.|
What do bylaws cover?
Your bylaws must include a rule for the conditions of membership in your organization and may include rules on the following issues:
- members’ roles and responsibilities
- directors’ elections and terms of office
- officers’ appointments and responsibilities
- meeting procedures
- notice requirements for board and members’ meetings
- adoption and amendment of bylaws
How detailed should bylaws be?
Most nonprofits now have lengthy bylaws. The current law, Ontario’s Corporations Act (CA), is very general, so nonprofits have to include every power and rule in their bylaws. The ONCA reduces the need for detailed bylaws because there are detailed rules in the legislation itself.
The benefits of simple bylaws are that they are easier to develop and limit the chance that your bylaws will conflict with the rules that are already in the ONCA.
How do we draft bylaws?
The Ministry of Government and Consumer Services (MGCS) has created a set of sample bylaws that you can use as a reference when developing your bylaws.
Whether you are a new or existing organization, you don’t need to adopt the sample bylaw as is. As long as you comply with the rules in the ONCA, you can:
- build your own bylaw from scratch
- modify your existing bylaw
- change the sample bylaw
To draft your bylaws based on MGCS’s sample, use the sample bylaw with options resource.