UPDATED: February 27, 2016
Bylaws are an important set of governing agreements in which the member-owners of a cooperative articulate the special dual relationship they have with each other: members of an association and owners of a business. In the bylaws, the member-owners define how they will make certain decisions together and how they will empower a board to make other decisions on their behalf. We offer this template as a guide for creating bylaws in a straightforward way that focuses on member-owner rights and responsibilities, something we hope will help all member-owners participate effectively in cooperative democracy.
When using this template, keep in mind:
- This template is provided for educational purposes and as an aid for your bylaw development, revision or review work. It is not legal advice or a substitute for legal advice.
- Each state has unique laws that govern incorporated entities like your cooperative. This template is general and useful across many states, but needs to be aligned with the specific requirements of your incorporation type and state. Seek appropriate legal advice.
- This template is a companion to the CBLD Policy Register Template. In that document, we offer guidance for how a co-op board can appropriately make further, more detailed decisions beyond what the bylaws mandate.
- We avoid repetition of requirements that are typically found in state laws. Some co-ops prefer to include such language, but should remember to periodically review for changes in state law that would affect your bylaws. Wherever we have included specific numbers (notice requirements, number of directors, etc.), you should consider these numbers as reasonable suggestions or “placeholders.” Your state’s law may guide or limit your choices.
- As with any such template, these bylaws are not intended to be an absolute recommendation, but rather a starting point and reference to guide your own conversation.
You might want to use this template as a starting point when:
- You haven’t done a “complete overhaul” of your bylaws in many years
- You want to fix specific provisions in your current bylaws
- You want a simple, readily understood bylaw document
- You anticipate active member-owner engagement around one or two key bylaw issues
A suggested process for using this bylaw template:
- Make a board decision to begin this work.
- Use this template, rather than your current bylaws, as your starting point.
- Review the Fresh Start version one section at a time. Within each section, ask:
- Is there anything in this version that is “wrong” for our co-op?
- Is there anything in the addendum notes to this template that we should incorporate into our work
- Is there anything in our current bylaws that we need to bring into the new version?
- Is there anything not consistent with our Articles of Incorporation?
- Ask your co-op’s lawyer for a focused legal review when you are close to completing your work. Rather than asking, “What do you think of these bylaws?” consider questions like:
- Have we missed anything critical?
- Have we included anything here that is not legal? (For example, does our state have unclaimed property laws that supersede the suggestions in this template?)
Engage your member-owners:
- Develop a communication plan to educate and engage member-owners and encourage voting. Keep them informed throughout the process. Consider using your web site, email, postal mail, social media and in-store communications.
- Invite long-term member-owners and/or opinion leaders to 1-2 focus groups to ask them for insight in general and on specific topics and questions.
- Schedule 1-2 open meetings for member-owners to comment and ask questions before the bylaws are finalized. Then schedule 1-2 more for member-owners to ask questions before the vote.
- Present your member-owners with the new proposed bylaws and an explanation of the voting procedures, along with a summary of the changes (including the board’s assessment about why the new version is better for the member-owners and co-op).
- Be prepared for “late comers” who won’t become engaged or comment before the proposed bylaws are formally presented for a vote.
- Understand and follow the process for changing bylaws as described in your current bylaws.
- CBLD Policy Register Template
- Bylaw Basics Field Guide http://library.cdsconsulting.coop/fieldguide/bylaws-basics/
- Legal Primer for Formation of Consumer-Owned Food Cooperatives http://www.foodcoopinitiative.coop/sites/default/files/LegalPrimer.pdf
- Best Practices for Membership Development in Food Co-ops http://library.cdsconsulting.coop/doc/best-practices-for-membership-development/