A corporation's bylaws exist as the company's internal rules and regulations that govern the business. Corporate bylaws need to be in writing to help avoid disputes between the company's directors, officers and shareholders regarding how to run the business. No specific rules exist as far as creating a corporation's bylaws. Many websites provide sample templates that can be used to create bylaws, or hiring an attorney to draft bylaws may be necessary, particularly in the case of a complex corporation.
Corporate bylaws are created by the incorporators of the business. An incorporator can be a person or business responsible for organizing the company, and filing the incorporation documents with the state. A corporation does not have a requirement to file the company's bylaws with any federal, state or local agency. The company needs to keep its bylaws at the primary office location, along with the corporation's other important business documents. Corporations may have to show the company's bylaws to investors, creditors and other interested parties to prove the company's legal existence.
What to Include
The bylaws should include information such as the time and place of shareholder and director meetings. A corporation's bylaws should establish how the company will keep records, as well as the name and address of the company's shareholders and directors. The document needs to address the powers granted to the company's officers, directors and shareholders as far as making decisions for the company. The number of directors that serve on the board of directors, and the term length of the directors must appear in the bylaws. Identifying information, such as the company's name and office location, should get mentioned in the corporate bylaws. The company's bylaws need to contain information regarding the corporation's record-keeping procedures and the process for selecting new directors.
A corporation's bylaws must state the number of shares the company has the authorization to issue to potential investors, if the company's articles of incorporation does not address the issue. The bylaws must state the type of shares the company has the authority to issue, as well as the voting and price per share privileges granted to the company's various shareholders. The document may address the duties of the company's officers and the compensation due to the officers of the corporation. Corporate bylaws may include the fiscal year of the business and the method used to conduct financial transactions.
Corporate bylaws get adopted at the company's first meeting. This means the bylaws become official, once the company's board of directors agrees to the provisions contained in the document. After the bylaws are adopted, they serve as the company's official rules and regulations. The corporation's board of directors can wait until the company's initial meeting to draft the bylaws, if the incorporators have not written bylaws for the business, as explained by the Findlaw website. The corporation's bylaws may get amended by the board of directors, in whole or in part, at subsequent company meetings.