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08/03/2021

Tips for Writing Corporate Bylaws

Your corporation’s bylaws provide the basic operating instructions regarding how your company will do business. It is one of the most important steps you will take when forming your corporation. 

 

Corporate bylaws are typically written after you've filed your articles of incorporation and are required by most states. Even if your state does not require them it’s a good idea to have them in place to create structure and procedures for your company. 

Items that Should Be in Your Corporate Bylaws

Corporate bylaws can be as brief or as expansive as you’d like, but typically include the following:

  • The Corporate Purpose, which includes:
    • Basic details about your corporation, such as the address and location of its headquarters.
    • The procedure for amending corporate bylaws and your articles of incorporation
    • The names of the officers and directors of the corporation
    • How many board members there are
    • How officers and directors are selected or removed
  • A requirement that your directors disclose any conflicts of interest they may have
  • Indemnification of directors and officers from liability for the corporation
  • The procedure you will follow for keeping your corporate records
  • The procedure for resolving internal disputes
  • Dates and procedures for your annual meeting
  • Requirements for a quorum for voting purposes
  • Rules for voting proxies
  • How your corporation will issue stock
  • The classes of stock and number of each class
  • The responsibilities that each officer

How to Make Corporate Bylaws Official

Once your bylaws have been written, they must be voted on by your board of directors. Once they are approved, the bylaws become official and binding. If your state requires bylaws, you must also file them with the state Secretary of State's office, or the agency in your state that manages corporations. Each board member and officer should receive a copy of your bylaws so they can become familiar with them.

How to Amend Your Bylaws

If a need arises to amend your corporation's bylaws, you should check your bylaws for the procedure you outlined to do this. Most bylaws contain an amendment procedure that requires calling a meeting of the board of directors and holding a vote on the amendment. 

 

Your bylaws should state how many votes are needed, but the general rule is the majority vote. If the amendment passes, you must then change the bylaws to reflect the change and, if required by your state, file the amended bylaws with the appropriate state agency.

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