All non-profit corporations must have an organizational structure and Rules or bylaws by which they are managed. The organizational structure is Comprised of directors and officers, which handle the internal management of The corporation, and perhaps also of members, which may have the right to Elect the directors of the corporation. The internal management of the corporation Is regulated by the corporate bylaws and the articles of incorporation.
An incorporator is someone who signs and delivers the Articles of Incorporation to the proper state office. In practice, the incorporator is often selected from among the persons who serve as the initial directors of the corporation. Your state law may require more than one person of legal age (18 or older).
Board members should be selected from the general community according to what they can provide to your organization. Find people with a sincere interest in the work of the organization and a commitment to its mission, vision and goals. This group should not be related individuals and no one should have more than one vote. Your state law may require 3 or more of legal age (18 or older) depending on your organization it is advisable to have at least 5 directors. Non-profit directors normally serve without compensation except for any expenses incurred in performing director duties.
What are their duties?
The Directors are charged with a “governing” role, acting in good faith, being diligent, prudently overseeing the affairs of the non-profit and not allowing personal interests to override responsibility as a director Thus, the board is answerable to the agency’s members, if any, and to the government agencies that regulate and monitor non-profit corporations on behalf of the community. The term of office is commonly set in the corporation’s bylaws. (Your state may set a maximum term.) Generally a majority quorum of the board of directors must be present to take action at a meeting and once a quorum is present, the affirmative vote of a majority of those present is usually necessary to pass a board. (Voting by proxy at a board meeting is illegal under the incorporation laws of most states.) Your board may take action without a meeting by written consent or conference call. Check your state’s nonprofit corporation law “Action by written consent.”
For effective governance, a board generally needs to meet at least every three months.
A written notice regarding the time and place of regular and special meetings must be sent to all board members a certain days prior to the meeting as stated in the bylaws. A provision for waiving notice should be included to allow directors to accept notice by telephone or other means.
You should have at least a President, a Secretary and a Treasurer. Typically, officers are selected from the board of directors. No one person should hold two or more offices. (Many states specifically prohibit this.) Their terms are fixed by the board of directors. The powers, duties and responsibilities of corporate officers are usually set in the bylaws. Generally, the actions and transactions of an officer are legally binding on the corporation. It is best to have your board pass a resolution granting the officer special authority to enter into a transaction on behalf of the corporation.
Any salaries/wages, fringe benefits or other forms of compensation paid or provided to the officers should not exceed a value which is reasonable and commensurate with the duties and working hours associated with such employment.