A corporation’s bylaws are the regulations that regulate how the company runs. When a corporation is founded, the board of directors must create the bylaws, which are a single document that contains all of the company’s rules. The majority of firms hire an attorney to draft their bylaws. Even so, understanding bylaws and why they’re vital for running a business and preserving order in an organization is beneficial. Are you looking for corporate bylaw templates? If yes, then scroll down below to download our templates for free!

21+ Corporate Bylaws

What Is a Corporate Bylaws?

A corporation’s internal management is organized by its bylaws, which are a set of written rules. A corporation’s bylaws also spell out its policies and responsibilities for its shareholders, directors, and executives. The corporation’s bylaws are written by the shareholders at the time of its formation. Corporate officers, board of directors roles, how they are elected, periods of office, how and when board and shareholder meetings will be held, and how the board of directors functions are all covered in bylaws. At a bare minimum, your company bylaws should include the corporation’s identifying information, such as its name, address, major place of business, whether it is a public or private corporation, and its fiscal year. The amount and kind of shares and stock classes that the corporation is authorized to issue, information about shareholder meetings—including notice of a meeting and proxy voting—annual meeting protocols, and requirements for alerting members should all be included in the bylaws. Every corporation must hold at least one annual meeting, hence the bylaws must include this provision.

Components: What Are Inside the Corporate Bylaws? 

Before you can write a corporate bylaw, you have to get to know what it contains so that you’ll have an idea and understanding of what it is. Listed below are elements that should be included and contain in a corporate bylaw: 

 Statement of Purpose: It should be emphasized what every aspect of your corporation and its function is. The purpose of the corporation is helpful, especially for the board of directors, because it leads the leaders to the proper stability of the company. It has a vital role in attracting investors because they can easily value what the corporation is about by knowing its bylaws. Your statement of purpose should cover every aspect of your business and its target market. It should primarily provide the following details: Who you are in business, who your primary customers would be, what you will do for you customers, what makes your services or products unique, how are you different from your competitors and what are you willing to do to reach your business goals. In essence, your statement of purpose explains why you do what you do and what motivates you to do it.  The Board of Directors: It should input the details of the board of directors, as it is the main people of the company, including its functions, powers, and duties. The details specify things like how many terms a director can serve in the corporation, and how many directors can constitute a quorum in a corporate meeting. The number of directors the corporation has, how they will be elected, their qualifications, and the length of their terms are all often specified in corporate bylaws. It can also establish when, where, and how your board of directors can hold meetings, as well as voting rules. The board of directors of a corporation plays an important role in corporate governance. They supervise all of the company’s officials and are frequently involved in discussions on corporate strategy and planning. Unlike the officials of a corporation, directors are often not employees and report solely to the shareholders.  Shareholder’s Meetings: The most important component to be added is the corporation’s meetings, it shall include the place of the meeting, where it will be held, annual and special meetings, and notices when the meeting will happen. There should be information when every year a meeting shall happen. The bylaws provide this for the board to remain updated on the company’s status and to address issues that concern the corporation. Not all the time it can conduct a meeting as some corporations had few shareholders or board of directors, thus it can be published through paper and memorandum. This clause will detail when and how your corporation’s shareholders will have annual and special meetings, as well as how notice of these meetings will be given, the order of business that will be followed, and the quorum required to vote at such meetings. The annual shareholder meeting is arguably the most significant requirement of a corporation. This might be a physical meeting of shareholders conducted anywhere your board of directors has given their approval. If your corporation, on the other hand, has only one or a few stockholders, it may be conducted on paper instead.  Organizational structure: Every organization’s management structure is already stated in its bylaws, although change in management is unavoidable. They also spell out how to fill a higher-ranking vacant post without disrupting the company’s leadership.  Information on the business: The company’s identification information is one of the most basic components of the bylaws. This includes information like the company’s registered name and address, as well as whether it is a private or public corporation. Make other arrangements for meetings. The bylaws establish the procedures for calling and scheduling meetings, as well as how they should be handled. This allows the board to stay informed about the company’s progress and address issues that concern the business.  Members: The methods for adding new members, if applicable, as well as voting rights. Some businesses have members, while others do not. If your company has members, it should have a documented membership policy. This policy should include the following information: your members’ rights and obligations, their qualifications, voting criteria, how and when your members will meet, how members will be disciplined, and how membership can be revoked or cancelled. A member of a corporation can be an individual, a corporation, a general or limited partnership, an association, or any other organization, unless your bylaws specify otherwise. Members of your corporation can attend member meetings in person or via a conference call, video call, or any other means of communication in which all participants can hear each other at the same time.  Committees: Your board of directors, as previously said, will play a vital role in corporate governance. Smaller groups of directors (committees) might be formed inside your board of directors to handle certain tasks. This clause applies to: What types of committees should your company have, how often they should meet, how they should operate, and what they are allowed to do. Committees are made up of board members who are put together for specialized objectives and are normally constituted and disbanded by a corporate resolution. The objective is for the organization to use the expertise of select members of its board of directors to solve problems or deal with matters that demand a certain level of specialized knowledge.  Indemnification: A provision in a corporation’s bylaws should normally protect its directors and officers from any liability that may arise as a result of their affiliation with the company. In most cases, directors and officers will desire to be compensated to the fullest extent permissible by law. This could be written into your bylaws, articles of incorporation, or both.  Approval of contracts and loans: A set of rules for approving contracts, loans, and other processes that the corporation may engage in should also be established.  Officers: The bylaws should include provisions for electing and appointing officers, as well as stating whether or not these officers will be board members and what their responsibilities will be. Officers are almost often employees of a firm, however this isn’t always the case. They are in charge of the corporation’s day-to-day operations and report directly to the board of directors. They are normally chosen or appointed by the board of directors once a year, and they can be removed at any moment if it is in the best interests of the company. 

How To Use a Corporate Bylaws 

You may design the standards needed to start your own corporation using a corporate bylaws template. Having suitable bylaws in place for your business helps to ensure that there are no legal or financial issues in the future. Corporate bylaws, also called company bylaws or just bylaws, are a set of instructions for how a corporation is run. Written by a company’s board of directors as one of its first duties, bylaws outline the operational procedures of those directly involved with the corporation. Are you planning to use a corporate bylaw template? Learn more below on how to use it properly and ensure that the following terms will be covered in your template: 

  1. Name and State of Incorporation

One of the first steps in forming a business is to choose a name that is available. Many state company filing websites offer a free search option to see if the business name you want is already taken. Because corporations must follow the rules of the state in which they are formed, the location of your business is crucial.

  1. Quorum, Annual Meeting, and Shareholders

Because shareholders are essentially the company’s owners, the annual meeting’s facts should be given to make voting easier. The bylaws should include a list of stockholders as well as their voting rights and the quorum (minimum number of members present) required to vote on issues.

  1. Committees and the Board of Directors

The board of directors is in charge of drafting the corporation’s bylaws, as well as laying out the procedure for selecting its members, which includes:

One of the board’s roles is to form committees made up of its own members to distribute responsibilities. It’s important to keep track of how these committees work.

  1. Dividends and Stocks

Because they reflect voting rights and ownership of the firm, the stock class and share type should be made clear. It’s also a good idea to specify how the business will handle and distribute dividends to its shareholders.

  1. Amendments

Corporate bylaws can be modified to reflect the company’s growth, however the process varies depending on the corporation. Changing the bylaws should, in most situations, just require a majority vote of the board of directors, shareholders, or both. State statutes, unlike articles of incorporation, are often lenient when it comes to bylaw modifications.

FAQs:

When do Bylaws for Corporations take effect?

At the first Directors’ Organizational Meeting, a corporation’s directors usually formally adopt Corporate Bylaws. The rules and procedures included in the company bylaws will come into effect (i.e. will begin to be used) after the bylaws are formed and agreed to at the first meeting, and will guide the company’s internal management until the company agrees to change its Corporate Bylaws using a Directors’ Resolution or Shareholders’ Resolution.

Is it possible to change a corporation’s bylaws?

Yes, Corporate Bylaws may need to be updated on occasion. Corporate regulations and legislation change throughout time, as do the company’s commercial needs. It’s critical that your Corporate Bylaws are updated to reflect these developments. Bylaw modifications are usually approved by a vote of the shareholders and directors. An amendment is adopted by the directors and incorporated into the Corporate Bylaws after it has been agreed to in writing (by a resolution).

What is the difference between corporate bylaws and articles of incorporation?

Articles of Incorporation are legal documents that must be filed with the Secretary of State in order for a corporation to be formed. Corporate bylaws are internal policies that define a corporation’s day-to-day rules and operating processes after it is founded. The state does not require that company bylaws be filed.