How to Create Corporate Bylaws. One of the first things you do when creating a new corporation is to write the bylaws. Bylaws are the legal information that describes the procedures the corporation will follow as a business entity. Here's what to include in corporate bylaws.
Include basic contact information for your corporation's headquarters.
Specify how the Board of Directors (BOD) is chosen and governed. Include the number of directors needed, voting procedure, procedure for documenting BOD meetings and procedure for replacing departing members and removing members who do not perform their duties adequately. Also specify the type of compensation board members receive, as well as what powers the board holds.
List the numbers and types of stock that your corporation can issue.
Describe the procedure for shareholder meetings. Include information such as protocol, frequency and the location of the meetings.
Identify the corporate record-keeping system and the rules for preparation of the records and inspection. You also should specify how to proceed when the bylaws conflict with the company's articles of incorporation.
Describe the procedure for amending bylaws and articles of incorporation.
- If yours is a public company and subject to SEC guidelines, hire an attorney to make necessary changes to your bylaws (see Resources below). Provide the attorney with any previous drafts of company policies and/or rules that describe the general aim of your company.
- Failure to create corporate bylaws puts your business at a serious disadvantage when dealing with banks, venture capital groups and the IRS. Companies that are serious about performing legally must have corporate bylaws.