Bylaws Corporation: Everything You Need to Know
States do require corporations to maintain updated bylaws, per the approval process of its board of directors, at its primary place of business.3 min read
2. Drafting Corporate Bylaws
3. What Is Covered in the Corporate Bylaws
4. Procedure for Filing Corporation Bylaws
5. AnchorBylaws vs. Articles of Incorporation
The bylaws a corporation uses govern the corporation. Bylaws are the written rules governing the structure and operation of a corporation. Bylaws can be applicable to both profit and non-profit businesses and organizations. All states require corporations to have bylaws, though there is no need to file them. Some states have statutes that ban government officials from accepting or recording bylaws.
Some corporations, however, prefer to file their bylaws as a matter of public record. Those corporations can do this, provided that a state does not forbid filing bylaws, when the corporation submits the other corporate paperwork.
States do require corporations to maintain updated bylaws, per the approval process of its board of directors, at its primary place of business.
Drafting Corporate Bylaws
With respect to a new corporation, the individual or individuals that initiated the incorporation process, called the "incorporator," will typically draft the bylaws. Alternatively, the new corporation’s board of directors will draft or formally adopt the bylaws as one of the board's first actions. The bylaws should discuss the corporation's primary goals and purpose for existence. When creating a new corporation, a priority is to create your corporate "bylaws," which are often confused with the articles of incorporation.
What Is Covered in the Corporate Bylaws
Typical corporation's bylaws will cover and contain the following:
• The corporation's identifying information, which typically includes the corporation’sname, address, and principal place of business.
• A count of authorized directors and corporate officers.
• Shares and stock classes that the corporation is authorized to issue, including number of shares and types of stock classes.
• Process for director and shareholder meetings, which includes the frequency and location of such meetings and the protocol for those meetings.
• Process for corporate record-keeping, which includes a procedure for preparing and inspecting records.
• Details about what would constitute a conflict of interest for the corporation.
• Process in respect of amending articles of incorporation and bylaws.
Procedure for Filing Corporation Bylaws
Step 1. Draft the corporation’s articles of incorporation in line with the requisite state requirements and local standards.
Step 2. Attain and review the secretary of state's requirements for items that are required to be included in corporate bylaws.
Step 3. Prepare a packet or deck that includes the articles of incorporation, bylaws, and any state-required incorporation form. Also, make sure to provide the secretary of state with a check for the state incorporation and filing fees.
Step 4. Mail the packet or deck, along with the check, to the secretary of state's office to the attention of its corporate records section or division.
Step 5. When the secretary of state’s office completed processing the documents, obtain copies of the articles of incorporation and bylaws. Those documents should be stamped with the secretary of state's seal. In addition, obtain a letter with respect to the creation of the corporation.
Some states require an additional form that authorizes power of attorney or delegation of such duty. This is especially relevant for corporations that chose to have an attorney or another individual who is not a director as the named point of contract.
AnchorBylaws vs. Articles of Incorporation
Articles of Incorporation are statutorily required to be filed with the state and cost money to amend, whereas bylaws are not filed with the state and can be amended, per a vote of the Board, at no cost.
Another important difference is that articles of incorporation are a document filed with the state that provides a general outline of the corporation’s makeup, whereas bylaws are not filed with the state and provide significantly more detail.
The articles of incorporation are a document filed with the state which generally outlines the makeup of the corporation, while bylaws go into much more detail and do not have to be filed with an agency. Note that other types of business structures, such as partnerships, may be required to draft and can benefit from writing bylaws.
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