Bylaws By Law
House corporations, like any corporation, need a legal basis and framework to work properly. The legal basis is established by filing Articles of Incorporation with your appropriate state agency, often the Secretary of State. This is usually a relatively simple and inexpensive procedure.
Every house corporation also needs “bylaws” which are the framework by which a corporation operates. Bylaws have been defined as “The document that contains the ground rules by which a corporation is run. Bylaws normally establish such matters as the titles and duties of officers, the timing and procedures for board meetings and the annual meeting.” Let’s further define components of this definition.
Board of Directors. House corporations typically have three or more directors. (The number of directors should be an odd number so votes aren’t deadlocked.) Directors are usually elected for terms ranging typically from one to three years. The directors run the business of the house corporation and meet periodically to discuss issues and to enact and enforce policies and procedures. From the pool of directors, officers are appointed.
Officers. House corporations have a leadership structure. At minimum, there should be a President, Treasurer and Secretary. If the number of directors permits, a Vice President position can be created. Officers are typically appointed and ratified by the board majority with a term of office lasting until the next election. Officers can step down voluntarily or be removed by the board at any time.
a. President. The President is the highest office on the house corporation totem pole. The President has authority to speak and act on behalf of the board as long as those actions conform to the approved budget and established policies and procedures. If the issue falls outside these boundaries, the President should
hold a board meeting to determine the board majority’s wishes before proceeding. The President runs board meetings and usually has check and contract signing authority.
b. Vice President. This officer fills in for the President when he is unavailable. He can be called on by the President to assist in scheduling and organizing meetings, compiling meeting agendas and other executive tasks. The Vice President often takes over the President’s position if it becomes vacant between elections.
c. Treasurer. This officer is responsible for the financial aspects of the house corporation. The duties include reconciling bank accounts, producing financial reports, drafting the annual budget, paying bills and collecting rent and other money owed to the house corporation. The Treasurer usually has check signing authority.
d. Secretary. This officer is in charge of taking minutes at meetings and performing various house corporation communications which could include letters, newsletters and website updates.
Board Meetings. The house corporation should meet at regular intervals to review financial reports, organize fund raising and deal with routine and special issues. When properly organized, quarterly meetings will usually suffice. Ideally, meetings should be face to face but can also be done effectively by teleconference. Teleconferencing allows the inclusion of directors who may not live locally or who are out of town.
Board meetings should always have a predetermined agenda and time frame. Meetings should generally not last longer than two hours (one is better). Properly organized meetings include providing the directors with agendas and related information in advance of the meeting for review.
All meetings should be action driven. Agenda items should have specific recommendations for voting and not simply be rambling discussions. Volunteers value their time and running effective and efficient meetings is an important way to respect that time. It’s the President’s job to ensure the agenda stays focused and moving forward. One way to do this is a timed action agenda. Here’s a sample:
- Open Forum. 15 minutes.
- Approve Minutes of Last Board Meeting. (Secretary) 5 minutes.
- Review Current Financial Statement (Treasurer) 5 minutes
- Newsletter. 5 minutes
- Fundraiser. 15 minutes
Old Business Items.
- Approve roof contract. 15 minutes
New Business Items.
- Approve new bylaws. 30 minutes
- Others Items? 15 minutes
- Set Date of Next Meeting. 1 minute
The annual meeting agenda is similar but with the addition of Board Elections.
Bylaws provide the framework every house corporation needs. If your house corporation has not yet adopted bylaws, a sample has been developed by Grand Trustees Harvey Silverman and Rich Thompson which can be adapted for your use. It can be found at the end of this newsletter. As with any legal document, it should be reviewed by a qualified attorney in your local jurisdiction to ensure that the necessary omissions and additions are made so it complies with all applicable statutes.
All house corporations which aren’t incorporated should make arrangements immediately to have this done. For guidance, contact your province’s Grand Trustee. A list with contact information is found on Page One.