Please enable JavaScript and Cookies in order to use this site. Under Linux, any browser using the latest Mozilla engine should work. Corporate Bylaws are a set of written rules used by a corporation to organize its internal management.
Company bylaws also outline the policies and responsibilities for the shareholders, directors, and officers of a corporation. Corporations need Corporate Bylaws to structure their organizations. When a company is incorporated, Corporate Bylaws are created and used to set out:. There are a number of decisions that should be included in a company's Corporate Bylaws, such as:.
Corporate Bylaws are also used to decide the number of directors the corporation will have, who is eligible to appoint officers, and whether or not the corporation can lend money to its officers, directors, or employees.
Usually, the directors of a corporation formally adopt Corporate Bylaws at the first Directors' Organizational Meeting. After the bylaws are formed and agreed to at the first meeting, the rules and procedures included in the company bylaws will come into effect i. Yes, Corporate Bylaws may need to be amended from time to time.
Corporate regulations and laws occasionally change, as do the business needs of the corporation. It's important to update your Corporate Bylaws to reflect these changes. Usually, shareholders and directors must vote to pass bylaw amendments. After an amendment has been agreed to in writing using a resolution , it is adopted by the directors and integrated into the Corporate Bylaws. Articles of Incorporation are legal papers that are filed with the Secretary of State in order for a business to be registered as a corporation.
Corporate Bylaws are internal policies that lay out the day-to-day rules and operating procedures for a corporation after it has been formed. Company bylaws do not need to be filed with the state. All Rights Reserved. We provide information and software, and you are responsible for appropriately using this material. Your use of this site is subject to our Terms of Use.
Use of this site is subject to our Terms of Use. We provide information and software and you are responsible for appropriately using this material. Grow Your Legal Practice. Meet the Editors. Your corporation needs bylaws.
Here's what you should include and leave out. Stockholder Meetings Bylaws should provide rules for how stockholders called shareholders in some states hold meetings and make decisions.
Director Appointments and Meetings Your bylaws should state the number of permitted directors, as well as their term lengths. Appointment of Officers In a corporation, the board of directors selects the officers. Stock Certificates Bylaws should address whether or not the company will be required to issue physical stock certificates to its shareholders. Bylaw Amendments Your bylaws serve as the foundation of your business' corporate governance.
Topics Traditionally Not Covered in the Bylaws While the business laws of most states typically allow a great deal of leeway with respect to the topics bylaws can cover, there are still certain matters that are traditionally excluded. Business Formation. Choosing a Business Structure. Sole Proprietorships. Forming a Corporation. See All Business Formation Articles. Talk to a Lawyer Need help? Start here. Practice Area Please select Zip Code. How it Works Briefly tell us about your case Provide your contact information Choose attorneys to contact you.
Ready to start your corporation? Related Products More. View More. If your business is a non-profit and you are looking to file for tax exempt status, the statement of purpose is especially important.
This statement will help determine whether your company qualifies for tax exempt status with the federal government. The member section of your bylaws will layout the rules for the types of members your company will have, voting rights of the members, and procedures for adding members. Other important membership information includes:. The board of directors of your corporation is a very important part of corporate governance.
The board oversees the officers of the company and because they are usually not employees, only report to shareholders.
These rules can include:. Image via Pexels by Christina Morillo. Corporations are required to hold corporate meetings, specifically, an annual shareholders meeting. In addition to the shareholders meeting, monthly or quarterly regular meetings can be held, and special meetings may also be called.
The bylaws will dictate how these meetings are called and noticed, and layout the procedures that will be followed during the meeting. Depending on state in which your company is incorporated, there may be specific requirements that you must follow for the corporate meetings. If you are unsure of your state business laws, you could consult with a corporate lawyer.
Some corporations opt to create committees within their board of directors. Committees will perform specialized tasks for the corporation. If you choose to have committees within your corporation, your bylaws should include the following:. Committees will generally utilize specific knowledge by board members to make recommendations as to how to solve problems within the company.
Some examples of committees that a corporation may form include:. Issuing stock to shareholders should be one of the first orders of business for a newly incorporated company.
The corporate bylaws will detail the number and type of stock classes that can be issued, who is entitled to receive stock, and how stocks will be transferred.
Officers are usually employees of the corporation, and they oversee the day-to-day operations of the company and report to the board of directors. Officers can sometimes be board members, but this needs to be specified in the bylaws. The bylaws will also dictate how officers are elected and appointed and what responsibilities they will have. Common officer tiles you will find in a corporation include:.
It is common for bylaws to require directors to disclose any conflicts of interests they may have that could prevent them from acting in the best interest of the company. For more examples of laws and rules that appear in corporate bylaws, read this article.
Articles of Incorporation are a legal document that is filed with the state when a business becomes incorporated. This document allows a business to be recognized as a legally functioning corporation. Included in the articles of incorporation will be basic information about the business like the name, place of business, when the business was formed, and sometimes, who will be included on the board of directors.
Corporate Bylaws are the guidelines by which the company will run. The biggest difference between articles of incorporation and bylaws is that bylaws do not have to be filed with any government agency. Corporate bylaws are like the operating agreements for corporations. Most corporate bylaws usually follow the same basic structure even though the specifics will vary for each company.
Bylaws will then describe the reason why the company was formed and the goals of the corporation. The body of the corporate bylaws is filled by the various laws that the company will abide by. This usually begins by describing the leadership structure and the roles and responsibilities of each member of the corporation. If you are unsure how to structure your corporate bylaws, you can easily find a template online.
Each state has different laws regarding what needs to be included in bylaws, so it is always a good idea to consult with a corporate lawyer when drafting this important document. Do you have any questions about corporate bylaws and other corporate governance issues and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from corporate lawyers who specialize in corporate governance.
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