**EXHIBIT 3.1**

**AMENDED AND RESTATED**

**B Y-L A W S**

**of**

**_________________________________**

**POWER EFFICIENCY CORPORATION**

**(a Delaware Corporation)**

**(as amended and restated March 23, 2004)**

**_________________________________**

**ARTICLE I – OFFICES**

          The registered office of Power Efficiency Corporation (the “Corporation”) shall be located in Wilmington, Delaware.  The principal office of the Corporation shall be in the City of Livonia, State of Michigan.  The Corporation may also have offices at such other places within or without the State of Delaware as the board of directors of the Corporation (the “Board”) may from time to time determine or the business of the Corporation may require.

**ARTICLE II – STOCKHOLDERS**

     **1.**      **Place of Meetings.**

          Meetings of stockholders shall be held at the principal office of the Corporation or at such place within or without the State of Delaware as the Board shall authorize.

     **2.**      **Annual Meeting.**

          Annual meetings of the stockholders shall be held on such dates and times as may be fixed by the Board, where the stockholders shall elect a Board and transact such other business as may properly come before the meeting.

     **3.**      **Special Meetings.**

          Special meetings of the stockholders may be called only (i) by the President of the Corporation, or (ii) by the Secretary of the Corporation upon (a) the request of the Board by a resolution adopted pursuant to Article III, Section 8, (b) the request in writing by three members of the Board, or (c) the request in writing by stockholders owning a majority of the voting power of 

 

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the outstanding shares of the Corporation entitled to vote generally in the election of directors (the “Voting Stock”).  Such request shall state the purpose or purposes of the proposed meeting.  Business transacted at a special meeting shall be confined to the purposes stated in the notice.

     **4.**      **Fixing Record Date.**

          For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the Board shall fix, in advance, a date as the record date for any such determination of stockholders.  Such date shall not be more than fifty nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action.  If no record date is fixed, it shall be determined in accordancewith the provisions of law.

     **5.**      **Notice of Meetings of Stockholders.**

          Written notice of each meeting of stockholders shall state the purpose or purposes for which the meeting is called, the place, date, and hour of the meeting and, unless it is the annual meeting, shall indicate that it is being issued by or at the direction of the person or persons calling the meeting.  Notice shall be given either personally or by mail to each stockholder entitled to vote at such meeting, not less than ten nor more than fifty days before the date of the meeting.  If action is proposed to be taken that might entitle the stockholders to payment for their shares, the notice shall include a statement of that purpose and to that effect.  If mailed, the notice is given whendeposited in the United States mail, with postage thereon prepaid, directed to the stockholder at his address as it appears on the record of stockholders, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address.

     **6.**      **Waivers.**

          Notice of meeting need not be given to any stockholder who signs a waiver of notice, in person or by proxy, whether before or after the meeting.  The attendance of any stockholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him.

     **7.**      **Quorum of Stockholders.**

          The holders of a majority of the voting power of the Voting Stock shall constitute a quorum at a meeting of stockholders for the transaction of any business, provided that when a specified item of business is required to be voted on by a class or classes, the holders of a majority of the shares of such class or classes shall constitute a quorum for the transaction of such specified item of business.

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          Once a quorum is present at a duly organized meeting, the subsequent withdrawal of enough stockholders to leave less than a quorum shall not invalidate actions otherwise duly taken at such meeting.

          The stockholders present at a meeting of Stockholders may adjourn the meeting despite the absence of a quorum.

     **8.**      **Proxies.**

          Every stockholder entitled to vote at a meeting of stockholders or to express consent or dissent without a meeting may authorize another person or persons to act for him by proxy.

          Every proxy must be signed by the stockholder or his attorney-in-fact.  No proxy shall be valid after expiration of eleven months from the date thereof unless otherwise provided in the proxy.  Every proxy shall be revocable at the pleasure of the stockholder executing it, unless otherwise provided in the proxy and permitted by law.

     **9.**      **Qualification of Voters.**

          Every stockholder of record shall be entitled at every meeting of stockholders to one vote for every share standing in his name on the record of stockholders, unless otherwise provided in the Certificate of Incorporation.

     **10.**      **Vote of Stockholders.**

          Except as otherwise required by statute or by the Certificate of Incorporation:

          **(a)** directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the holders of shares entitled to vote in the election;

          **(b)** all other corporate action shall be authorized by a majority of the votes cast.

     **11.**      **Written Consent of Stockholders.**

               Any action that may be taken by vote may be taken without a meeting on written consent, setting forth the action so taken, signed by the holders of a majority of the voting power of the Voting Stock.

**ARTICLE III – DIRECTORS**

|  | **1.** | **Board of Directors.** |
|--|--------|-------------------------|

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          Subject to any provision in the Certificate of Incorporation, the business of the Corporation shall be managed by its Board, each member of which shall be at least eighteen years of age and need not be stockholders.

     **2.**      **Number of Directors.**

          The number of directors shall be fixed from time to time exclusively by the Board.  

     **3.**      **Election and Term of Directors.**

          Each director shall be elected to hold office for a term expiring at the first annual meeting of stockholders held following such director’s election and until his successor has been elected and qualified, or until his prior resignation or removal.

     **4.**      **Newly Created Directorships and Vacancies.**

          Subject to the rights of the holders of any series of Preferred Stock or any other series or class of stock as set forth in the Certificate of Incorporation to elect additional directors under specified circumstances, vacancies resulting from death, resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled by the affirmative vote of a majority of the remaining directors or by the affirmative vote of a majority of the voting power of the Voting Stock.

     **5.**      **Removal of Directors.**

          Any director may be removed from office at any time, but only by the affirmative vote of the holders of at least 80 percent of the voting power of the then outstanding Voting Stock, voting together as a single class and on an as converted basis.

     **6.**      **Resignation.**

          A director may resign at any time by giving written notice to the Board, the President, or the Secretary of the Corporation.  Unless otherwise specified by the notice, the resignation shall take effect upon receipt thereof by the Board or such officer, and the acceptance of the resignation shall not be necessary to make it effective.

     **7.**      **Quorum of Directors.**

          No action shall be taken at any meeting of the Board, except for the adjournment of such meeting, unless at least a majority of the members of the Board (a quorum) are present.  For purposes of a quorum, any director may be present at any meeting in person, by means of telephone or similar communications equipment by means of which each person participating in the meeting can hear and speak to each other or, to the extent permitted under applicable law, by proxy or by nominee director.  

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     **8.**      **Action of the Board.**

          **(a)**      The vote of a majority of the directors present at the time of the vote, if a quorum is present at such time, shall be the act of the Board.  Provided, however, that an abstention by any director shall not be considered when determining whether a majority of directors voted in favor of any action but shall be considered when determining whether a quorum is present.  Each director present shall have one vote regardless of the number of shares, if any, which he may hold.

          **(b)**      Whenever any action is required or permitted to be taken by the Board or any committee thereof, such action may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action.  The resolution and the written consent thereto by members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee.

     **9.**      **Place and Time of Board Meetings; Notice; Adjournment.**

          **(a)**      The Board may hold its meetings at the office of the corporation or at such other places, either within or without the State of Delaware, as it may, from time to time, determine.

          **(b)**      A regular annual meeting of the Board shall be held immediately following each annual meeting of stockholders at the place of such annual meeting of stockholders.

          **(c)**      Regular meetings of the Board may be held without notice at such time and place as it from time to time shall determine.

          **(d)**      Special meetings of the Board shall be held upon notice to the directors and may be called by the President upon three days' notice to each director either personally, by mail, by fax or by e-mail; special meetings shall be called by the President or by the Secretary in a like manner on written request of two directors.  Notice of a meeting need not be given to any director who submits a waiver of notice whether before or after the meeting or who attends the meeting without protesting prior thereto, or at its commencement, to the lack of notice to him.

          **(e)**      A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place.  Notice of the adjournment shall be given to all directors who were absent at the time of the adjournment and, unless such time and place are announced at the meeting, to the other directors.

     **10.**      ******Chairman.**

          At all meetings of the Board, the Chairman or, in his absence, the President or, in his absence, an ad hoc chairman chosen by the Board shall preside.

     **11.**      ******Executiveand Other Committees.******
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          The Board may appoint such committees, including an audit committee and a compensation committee, as shall be permissible under Section 141 of the General Corporation Law of the State of Delaware and as the Board shall deem reasonable and necessary.

          Any such committee, to the extent provided by resolution of the Board, may exercise any of the powers and authority of the Board in the management and business affairs of the Corporation.

     **12.**      **Compensation.**

          No compensation shall be paid to directors, as such, for their services, but by resolution of the Board a fixed sum and expenses for actual attendance at each regular or special meeting of the Board may be authorized.  Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

**ARTICLE IV – OFFICERS**

     **1.**      **Offices, Election, Term.**

          **(a)**      The Board may elect or appoint a Chairman of the Board, a President, one or more Vice Presidents, a Secretary, and a Treasurer, and such other officers as it may determine, who shall have such duties, powers, and functions as hereinafter provided.

          **(b)**      All officers shall be elected or appointed to hold office until the meeting of the Board following the next annual meeting of stockholders.

          **(c)**      Each officer shall hold office for the term for which he is elected or appointed and until his successor has been elected or appointed and qualified.

     **2.**      **Removal, Resignation, Salary.**

          **(a)**      Any officer elected or appointed by the Board may be removed by the Board with or without cause.

          **(b)**      In the event of the death, resignation, or removal of an officer, the Board in its discretion may elect or appoint a successor to fill the unexpired term.

          **(c)**      Any two or more offices may be held by the same person, except the offices of President and Secretary.

          **(d)**      The salaries of all officers shall be fixed by the Board.

          **(e)**      The directors may require any officer to give security for the faithful performance of his duties.

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     **3.**      **Chairman of the Board.**

               The Chairman of the Board shall be appointed by a majority of the members of the Board; he shall preside at all meetings of the stockholders and of the Board and he shall see that all orders and resolutions of the Board are carried into effect.

     **4.**      **President.**

               The President shall act in a general executive capacity in the administration of the Corporation’s business and general supervision of its policies and affairs.  The President shall, in the absence of or because of the inability to act of the Chairman of the Board, perform all duties of the Chairman of the Board and preside at all meetings of stockholders and of the Board.  The President may sign, alone or with the Secretary or any other proper officer of the Corporation authorized by the Board, certificates, contracts and other instruments of the Corporation as authorized by the Board.

     **5.**      **Vice-Presidents.**

               During the absence or disability of the President, the Vice President or, if there are more than one, the Executive Vice President, shall have all the powers and functions of the President.  Each Vice President shall perform such other duties as the Board shall prescribe.

     **6.**      **Secretary.**

               The Secretary shall;

          **(a)**      attend all meetings of the Board and of the stockholders;

          **(b)**      record all votes and minutes of all proceedings in a book to be kept for that purpose;

          **(c)**      give or cause to be given notice of all meetings of stockholders and of special meetings of the Board;

          **(d)**      keep in safe custody the seal of the Corporation and affix it to any instrument when authorized by the Board;

          **(e)**      keep all the documents and records of the Corporation as required by law or otherwise in a proper and safe manner;

          **(f)**      perform such other duties as may be prescribed by the Board.

     **7.**      **Assistant Secretaries.**

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               During the absence or disability of the Secretary, the Assistant Secretary or, if there are more than one, the one so designated by the Secretary or the Board, shall have all the powers and functions of the Secretary.

     **8.**      **Treasurer.**

          The Treasurer shall;

          **(a)**      have the custody of the corporate funds and securities;

          **(b)**      keep full and accurate accounts of receipts and disbursements in the corporate books;

          **(c)**      deposit all money and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Board;

          **(d)**      disburse the funds of the Corporation as may be ordered or authorized by the Board and preserve proper vouchers for such disbursements;

          **(e)**      render to the President and Board at the regular meetings of the Board, or whenever they require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation;

          **(f)**      render a full financial report at the annual meeting of the stockholders if so requested;

          **(g)**      be furnished by all corporate officers and agents, at his request, with such reports and statements as he may require as to all financial transactions of the Corporation;

          **(h)**      perform such other duties as are given to him by these by-laws or as from time to time are assigned to him by the Board or the President.

     **9.**      **Assistant Treasurer.**

          During the absence or disability of the Treasurer, the Assistant Treasurer or, if there are more than one, the one so designated by the Treasurer or by the Board, shall have all the powers and functions of the Treasurer.

     **10.**      **Sureties and Bonds.**

          In case the Board shall so require, any officer or agent of the Corporation shall execute to the Corporation a bond in such sum and with such surety or sureties as the Board may direct, conditioned upon the faithful performance of his duties to the Corporation and including responsibility for negligence and for the accounting for all property, funds, or securities of the Corporation which may come into his hands.

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**ARTICLE V – CERTIFICATES FOR SHARES**

     **1.**      **Certificates.**

          The shares of the Corporation shall be represented by certificates.  They shall be numbered and entered in the books of the Corporation as they are issued.  They shall exhibit the holder's name and the number of shares and shall be signed by the President or a Vice President and the Chairman, Treasurer or the Secretary, and shall bear the corporate seal.  The signatures upon a certificate may be facsimiles.  In case the Chairman or any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer or Chairman before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officerat the date of its issue.

     A certificate representing shares shall not be issued until the full amount of consideration therefor has been paid or received in accordance with law except as Section 152 of the General Corporation Law may otherwise permit.

     **2.**      **Lost or Destroyed Certificates.**

          The Board may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation, alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed.  When authorizing such issue of a new certificate or certificates, the Board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such sum and with such surety or sureties asit may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed.

     **3.**      **Transfers of Shares.**

          **(a)**      Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the Corporation.  No transfer shall be made within ten days preceding an annual meeting of stockholders.

          **(b)**      The Corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of the State of Delaware.

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     **4.**      **Closing Transfer Books.**

          The Board shall have the power to close the share transfer books of the Corporation for a period of not more than ten days during the thirty day period immediately preceding (i) any stockholders’ meeting, or (ii) any date upon which stockholders shall be called upon to or have a right to take action without a meeting, or (iii) any date fixed for the payment of a dividend or any other form of distribution, and only those stockholders of record at the time the transfer books are closed shall be recognized as such for the purpose of (a) receiving notice of or voting at such meeting, (b) allowing them to take appropriate action, or (c) entitling them to receive any dividend or other form ofdistribution. 

**ARTICLE VI – DIVIDENDS**

     Subject to the provisions of the Certificate of Incorporation and to applicable law, dividends on the outstanding shares of the Corporation may be declared in such amounts and at such time or times as the Board may determine.  Before payment of any dividend, there may be set aside out of the net profits of the Corporation available for dividends such sum or sums as the Board, from time to time, in its absolute discretion deems proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Board shall think conducive to the interests of the Corporation, and the Board may modify or abolish any suchreserve.

**ARTICLE VII – CORPORATE SEAL**

          The seal of the Corporation shall be circular in form and bear the name of the Corporation and the words “Corporate Seal, Delaware.”  The seal may be used by causing it to be impressed directly on the instrument or writing to be sealed, or upon adhesive substance affixed thereto.  The seal on the certificate for shares or upon any corporate obligation for the payment of money may be a facsimile, engraved or printed.

**ARTICLE VIII – EXECUTION OF INSTRUMENTS**

          All corporate instruments and documents shall be signed or countersigned, executed, verified, or acknowledged by such officer or officers or other person or persons as the Board may from time to time designate.

**ARTICLE IX – FISCAL YEAR**

          The fiscal year shall begin on the first day of January in each year or at such other time as may be designated by the Board.

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**ARTICLE X – REFERENCES TO CERTIFICATE OF INCORPORATION**

          Reference to the Certificate of Incorporation in these by-laws shall include all amendments thereto or changes thereof unless specifically excepted.

**ARTICLE XI – BY-LAW CHANGES**

**AMENDMENT, REPEAL, ADOPTION, ELECTION OF DIRECTORS.**

     **(a)**      The by-laws may be amended, repealed, or adopted by vote of the holders of the shares at the time entitled to vote in the election of any directors.  By-laws may also be amended, repealed, or adopted by the Board; but any by-law adopted by the Board may be amended by the stockholders entitled to vote thereon as hereinabove provided.

     **(b)**      If any by-law regulating an impending election of directors is adopted, amended, or repealed by the Board, there shall be set forth in the notice of the next meeting of stockholders for the election of directors the by-law so adopted, amended, or repealed, together with a concise statement of the changes made.

**POWER EFFICIENCY CORPORATION**

__________________________________Timothy Franzen, *Secretary*

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