Bylaws and Articles of Incorporation: Key Documents for Forming a 501(c)(3)

When founders prepare to form a 501(c)(3) nonprofit, most attention goes to the IRS application. What many do not realize is that the IRS relies heavily on two foundational documents when reviewing an application: the Articles of Incorporation and the bylaws.

These documents do more than establish a nonprofit at the state level. They define how the organization operates, how decisions are made, and whether the nonprofit meets federal requirements for tax-exempt status. Inconsistencies or missing language can delay or complicate IRS review.

This guide explains what each document does, what language the IRS expects to see, and how bylaws and articles affect Form 1023 approval.

What Are Articles of Incorporation?

The Articles of Incorporation are the legal documents that create a nonprofit corporation with the state. Once filed and approved, the nonprofit exists as a separate legal entity.

Articles of Incorporation typically include:

• the nonprofit’s legal name
• its charitable purpose
• the registered agent and office
• initial board or incorporator information
• required tax-exempt provisions

Although Articles are filed with the state, they are also reviewed by the IRS as part of the 501(c)(3) application process.

IRS-Required Language in Articles of Incorporation

For a nonprofit seeking 501(c)(3) status, the IRS expects specific language to appear in the Articles of Incorporation.

Common required provisions include:

• a purpose clause limited to charitable, educational, religious, or similar activities
• a prohibition on private benefit and political activity
• a dissolution clause stating that assets will be distributed to another 501(c)(3) if the organization closes

Missing or improperly worded clauses are a frequent reason the IRS requests corrections or additional documentation.

Because Articles are filed at the state level, correcting errors later may require amendments, which can slow the exemption process.

What Are Nonprofit Bylaws?

Bylaws are the internal operating rules of a nonprofit. Unlike Articles of Incorporation, bylaws are usually not filed with the state. However, they play a critical role in governance and IRS review.

Bylaws explain how the organization functions day to day, including:

• board structure and authority
• meeting and voting procedures
• officer roles and duties
• committee authority
• conflict management

The IRS reviews bylaws to assess whether the nonprofit has appropriate oversight and controls in place.

What the IRS Looks for in Bylaws

When reviewing Form 1023, the IRS compares the bylaws to:

• the Articles of Incorporation
• the stated mission and activities
• compensation and governance disclosures

Bylaws should demonstrate that:

• the board has independent authority
• decision-making processes are defined
• conflicts of interest are addressed
• the organization operates for public benefit

Many nonprofits also adopt a separate conflict of interest policy, which complements the bylaws and supports IRS expectations around transparency.

State Requirements for Bylaws and Articles

State law governs nonprofit formation, which means requirements vary by jurisdiction.

In most states:

• Articles of Incorporation must be filed with the state
• bylaws must be adopted internally
• initial board actions must be documented

Some states require additional language in Articles for charitable organizations, while others impose minimum board size or officer requirements.

Because the IRS reviews state-filed documents, alignment between state law and federal rules is important.

Common Mistakes Founders Make

Many delays in the 501(c)(3) process can be traced back to document issues.

Common problems include:

• Articles that lack required IRS language
• bylaws copied from templates without customization
• inconsistencies between bylaws and Articles
• governance provisions that allow excessive control by insiders
• missing references to conflict management

These issues often surface during IRS review, even if the state has already accepted the filings.Founders often review legal steps to start a nonprofit to understand where these documents fit in the overall formation process.

How Bylaws and Articles Affect Form 1023 Approval

Form 1023 asks detailed questions about governance, activities, and structure. The IRS uses bylaws and Articles to verify those answers.

For example:

• board size listed on Form 1023 must match the bylaws
• compensation authority must align with governance provisions
• dissolution language must appear in the Articles

When documents are unclear or inconsistent, the IRS may issue follow-up questions or request amendments. Reviewing common 501(c)(3) application mistakes can help founders understand how document issues affect approval timelines.

Chisholm Law Firm works with nonprofits nationwide on formation and tax-exemption filings. The firm has reported a strong approval history for IRS exemption applications, which it attributes in part to careful alignment between formation documents and IRS requirements. Outcomes always depend on accurate information and organizational facts.

Can Bylaws Be Changed Later?

Yes. Bylaws can usually be amended by board action, following the procedures outlined in the bylaws themselves.

That said, changes after filing Form 1023 may require disclosure to the IRS, especially if they affect governance, compensation, or mission-related provisions. Making changes early often reduces the need for later explanations.

Templates vs Custom Drafting

Many founders start with templates, which can be helpful for understanding structure. However, templates often:

• omit state-specific requirements
• include unnecessary provisions
• fail to reflect actual operations

Custom drafting allows documents to reflect how the nonprofit will actually function, which helps reduce discrepancies during IRS review.

FAQs

Are bylaws required for 501(c)(3)?

Bylaws are not always filed with the state, but the IRS commonly expects nonprofits to have them in place.

Do bylaws need to be filed with the state?

In most states, bylaws are adopted internally and kept with corporate records rather than filed.

What IRS language must be included in Articles of Incorporation?

Articles typically must include a charitable purpose clause and a dissolution clause that meets IRS requirements.

Can bylaws be amended later?

Yes. Bylaws can usually be amended by board action, subject to disclosure requirements if changes affect IRS filings.

Does Chisholm Law Firm draft bylaws?

Chisholm Law Firm provides legal services related to nonprofit formation, including drafting and reviewing bylaws and Articles of Incorporation as part of broader formation support.