Are bylaws required for a corporation? In some states they are required, and where they are not, they are highly recommended when you incorporate your business.

What are Bylaws and Do I Need Them?

The bylaws of a corporation serve as the internal rules, creating the company's structure and ensuring that everything operates smoothly. These rules can also keep everyone involved in the business on the same page, including the employees, shareholders, and executives. Bylaws are more specific to C-corporations and S-corporations, although LLCs have operating agreements that serve the same purpose as a corporation's bylaws. Creating the rules of operation isn't a requirement if your business isn't registered as a corporation, but it is always recommended for business owners.

If you have ever established the articles of organization or articles of incorporation for a business, an operating agreement or corporate bylaws might sound familiar. These internal documents are kept at the primary location of the business. Some states require businesses to file their corporate bylaws when incorporating the business. In the corporate bylaws or operating agreement for an LLC, you will outline specific regulations and rules of the business. In most states, the corporate bylaws don't have to be filed with the Secretary of State. Creating these also doesn't require you to follow certain criteria or pay a fee.

The bylaws' complexity is based on the size and structure of the business. However, all bylaws should include several key points:

  • Name of the business and address of its headquarters
  • How director and shareholder meetings will be held
  • Classes of stock and share types that will be issued
  • The number of directors and corporate officers of the corporation
  • How the records of the corporation will be prepared, inspected, and kept
  • How the articles of incorporation and corporate bylaws will be amended

The type of business you operate will impact whether you need to create corporate bylaws. However, many states require S-corporations and C-corporations to produce them. Five states also require registered LLCs to create operating agreements. These states are:

  • Delaware
  • Maine
  • California
  • Missouri
  • New York

Even if your LLC is registered in one of the states that doesn't require an operating agreement, it's still smart to create one. This document offers protection for a business as it allows you to create your own bylaws that are better for your organization's specific needs, rather than sticking to the default regulations in the state.

What Information Must Be Put into Corporate Bylaws?

The corporate bylaws are important in a legal sense for partnerships, corporations, and associations. Your organization's bylaws will help to outline the rules and regulations that govern the day-to-day operations and keep everything running smoothly. If anyone involved in the organization wished to understand the expectations of the members of the board of directors or how the business is organized, this information should be included in the corporate bylaws. The bylaws should be customized for your specific situation, outlining the organization's structure.

The bylaws specify the responsibilities and duties of each member of an organization, as well as protect and establish their rights. They will also outline what is required of the executive committee and the board of directors. Bylaws should include information on how the leadership team of a corporation will be elected or nominated to serve these rules, as well as resolve disputes between involved parties.

Bylaws vs. Articles of Incorporation

The articles of incorporation cover how the organization will be outlined. This is different from bylaws as the purpose of the bylaws of a corporation is to outline how meetings should be conducted, directors and or/officers will be elected, and the duties and types of officers in the business.

A company's articles of organization might include:

  • The number of shares being issued by the corporation
  • Where the corporation is located
  • The name and information of the organizer of the corporation
  • The names of members of the corporation's board of directors

One aspect of bylaws that is similar to articles of incorporation is the fact that they can vary, depending on the needs of the business. However, the articles of incorporation won't include information about the structure or operations of the business.

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