What you’ll discover:
What exactly are Company Bylaws?
Do I need Corporate Bylaws for my company?
What are the contents of Corporate Bylaws?
Do I need to hire a lawyer to draft my Company Bylaws?
When you are a new business owner, there is a lot to learn, including the legal side of what you must do to keep your firm running. The corporation form offers several advantages, such as reduced liability. Nevertheless, if you do not obey state laws, you may forfeit those advantages.
Corporation bylaws are typically a good idea, even if they are not needed in certain jurisdictions. They establish key ground rules for your company and assist executives in staying on the same page.
Table of Contents
What exactly are Company Bylaws?
Business bylaws establish the internal regulations of your company. Bylaws are more complex than Articles of Incorporation, which outline the fundamental elements for the foundation of a firm. They provide guiding concepts and directly address the business’s day-to-day operations.
Bylaws are typically prepared and adopted by the Board of Directors of a firm. For many small firms, this implies that you and your fellow owners will draft the bylaws, maybe with the assistance of an attorney.
Do I need Corporate Bylaws for my company?
Corporate Bylaws are not required for every firm. Some states do not require you to have them or to submit them with the Secretary of State or another authority. Alaska, Louisiana, Minnesota, and Utah, for example, do not require the development of corporate bylaws, but California and New York statutes require the creation of bylaws and the keeping of a copy at the corporation’s primary place of business.
Even though Corporate Bylaws are not necessary, they are still a good idea. Bylaws contain fundamental information concerning your company’s purpose and functioning. Addressing delicate problems at the onset of your company’s existence may help avert disagreement among owners later on.
What are the contents of Corporate Bylaws?
Bylaws might be as general or as particular as you like. Some of the most frequent phrases and issues included in a company’s bylaws are listed below.
Name, Purpose, and Office Address
The location and name of the firm will be specified in the bylaws. An overall goal or mission statement may also be included in the bylaws. This mission statement will include not just the company’s purpose but also its values.
Terms of Membership and Members
The particular names of members are generally specified in the bylaws. Moreover, it will define concepts that are directly related to membership. Among the most popular instances are:
How are members chosen?
Whether and how members may be removed
Discipline procedures for members
Membership Types Member Voting Rights
Some companies have no members. You may just declare this in your bylaws.
Details about the Board of Directors
The company’s management body is the Board of Directors. They give high-level monitoring and direction rather than conducting day-to-day operations. Corporations must, in general, have a Board of Directors.
In general, the Board of Directors part of the Corporate Bylaws will address:
The total number of directors
How directors are chosen
Qualification to serve on the Board of Directors
Anybody appointed to the Board of Directors’ tenure duration
Board of Directors Responsibilities
Prerequisites for Meetings
The rules should also specify how and when meetings will take place. The procedure for scheduling annual, regular, and extraordinary meetings should also be addressed in the bylaws.
Changing the Bylaws
You should also specify how the bylaws may be altered in the future. Although the bylaws may look full on the initial draft, they may need updates or revisions in the future. Your bylaws should detail the procedure for making such modifications. In general, your bylaws should be revised at least every five years.
Corporate Record-Keeping Practices
Some documents, such as minutes and articles of formation, must be kept by your company. The bylaws may specify how such documents will be generated and maintained in order to guarantee that your firm is legally compliant with state regulations. Members’ access to and inspection of documents may also be addressed in the bylaws.
Do I need to hire a lawyer to draft my Company Bylaws?
You do not need an attorney to draft your bylaws, but having a professional assist you may be a smart idea. Every business has its own set of bylaws, and each state has its own set of regulations for what should be contained in this corporate document.
