Time to Update Your Bylaws: What Florida Nonprofits Need to Know About HB 797

On July 1, 2026, Florida House Bill 797 (CS/CS/HB 797) took effect, modernizing Chapter 617 of the Florida Statutes (the state’s primary body of law governing nonprofit corporations) and renaming it the “Florida Nonprofit Corporation Act.” HB 797 touches governance fundamentals, including fiduciary standards, conflicts of interest, meeting procedures, and more. Given these changes, Florida nonprofits should be reviewing their articles of incorporation and bylaws to ensure conformity with the revised statutory framework. Rather than attempting to catalog every change the bill makes to Chapter 617, this article highlights select provisions most likely to require Florida nonprofits to review and amend their organizational documents.

Background

Chapter 617 had not been comprehensively updated since 1990. Formerly, it used “not for profit” terminology, imposed a three-director minimum on all organizations regardless of size, and lacked modern governance tools that have been standard in other states’ nonprofit statutes and in Florida’s own Business Corporation Act (Chapter 607). Critical areas, including conflicts of interest, standards of conduct, and entity transactions like mergers and conversions, were either underdeveloped or absent from the statute.

Key Changes

Governance and Board Mechanics

One of the governance reforms in HB 797 is the reduction of the minimum board size from three directors to one for most nonprofit corporations. The three-director minimum is retained only for organizations exempt under Section 501(c)(3) of the Internal Revenue Code. The bill also establishes a default one-year director term when the articles of incorporation or bylaws are silent on the subject, with incumbent directors continuing to serve until a successor takes office.

HB 797 modernizes meeting mechanics in several respects. The bill broadens who may call board meetings to include the chair, the president or similarly situated officer, or 20% of directors then in office. Furthermore, special member meetings may now be called by the board, persons authorized in the articles or bylaws, or by members holding at least 10% of voting power (raised from 5%). This change eliminates the former statutory list of specific officers authorized to call meetings in favor of deference to each organization’s governing documents. Board meeting notice provisions are consolidated so that regular board meetings may be held without notice of date, time, place, or purpose, while special meetings require at least two days’ notice. Finally, a new provision was introduced, permitting a director to withdraw written consent by delivering a signed revocation before all unrevoked consents are received.

Standards of Conduct, Conflicts of Interest, and Liability

HB 797 rewrites the standards of conduct applicable to nonprofit directors, bifurcating fiduciary duties into a “decision-making function” and an “oversight function.” The revised framework provides expanded reliance provisions, permitting directors to rely on officers, employees, legal counsel, accountants, and board committees reasonably believed to be competent and reliable. In a parallel development, the bill creates a new statutory standard for officers, requiring that they act in good faith, exercise appropriate care, and report material information to superiors or the board.

The bill also introduces a revised conflict-of-interest framework, defining key terms such as “director’s conflict of interest transaction,” “fair to the corporation,” and “family member,” along with specific burden-of-proof allocations and detailed approval procedures. Additionally, the director and officer liability shield, previously limited to organizations recognized under Section 501(c)(3), (c)(4), (c)(5), or (c)(6) of the Internal Revenue Code, is extended to directors and officers of all nonprofit corporations, with a new carve-out for recklessness or bad-faith conduct in proceedings brought by non-members.

Meetings, Remote Participation, and Membership

HB 797 revises written-consent procedures so that member action without a meeting is effective when signed by members entitled to cast the required number of votes and delivered to the corporation. The bill adds a new requirement that nonvoting members entitled to notice of proposed corporate action receive proper notice after written-consent authorization is obtained. In an important practical development, the bill also eases prerequisites for remote member participation: board authorization is no longer a strict prerequisite for virtual attendance, though the board must still implement reasonable verification and participation measures for remote attendees, proxies, and attorneys-in-fact.

Historically under Chapter 617, a member could not transfer a membership or any right arising from membership, whereas membership interests may now be transferred, provided that the corporation’s governing documents authorize such transfers. The bill also addresses repurchase rights, prohibiting 501(c)(3) corporations from purchasing membership interests while allowing other types of nonprofits to do so, to the extent their organizational documents allow.

Board Vacancies and Director Removal

Under the revised statute, vacancies (including those created by an increase in the number of directors) may be filled by a majority of the remaining directors, even if less than a quorum. Previously, vacancies could only be filled by the sole remaining director or through circuit court application. The term of a director filling a vacancy now runs to the end of the unexpired term being filled, rather than expiring at the next annual meeting. HB 797 also makes director removal provisions uniform across all nonprofits, eliminating a prior carve-out applicable only to Section 501(c) organizations, and creates a new judicial removal remedy allowing a court to remove a director for fraudulent conduct, gross abuse of position, or intentional harm to the corporation.

Amending the Articles of Incorporation

HB 797 revises the statutory process for amending the articles of incorporation by requiring the amendment to first be adopted by the board and then approved by the members; the board must recommend approval unless conflicts of interest or other special circumstances warrant proceeding without a recommendation. If no members are entitled to vote, the amendment may be adopted by a majority of directors then in office. Furthermore, the board may adopt certain non-substantive amendments without member approval.

What This Means for Nonprofits / Next Steps

The bill took effect on July 1, 2026. Here’s what Florida nonprofits should do:

• Review and update governing documents for provisions that track old statutory defaults and update them to reflect the new framework or to affirmatively opt into desired governance structures.
• Audit cross-references to repealed sections. HB 797 repeals several provisions that may still be cited in existing bylaws, including former Section 617.07401 (derivative actions), Section 617.0822 (board meeting notice), and Sections 617.1301 and 617.1302 (distributions). Remove or update these outdated cross-references.
• Update terminology from “not for profit” to “nonprofit” for consistency with the renamed statute.
• Read the full bill. This article highlights only select changes most likely to affect governing documents. HB 797 makes far broader changes to Chapter 617 that may be relevant to your organization.

If you have questions about how HB 797 affects your organization’s governing documents or governance practices, please contact the authors listed below.

Foley Summer Associate Sydney Nwuli contributed to this article.