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Corporate Bylaws basics

Corporate bylaws specify how your company will conduct its affairs. Even if your state does not require corporate bylaws, it is a good idea to have them in place because they will ensure the business runs smoothly and that everyone involved is on the same page.

What are Corporate Bylaws?

Corporate bylaws define a corporation's purpose and how it will operate. This document details the duties and responsibilities of the people who own and manage a corporation, and it describes how stock is issued by the corporation. Corporate Bylaws also let you specify shareholder ownership rights, select officers and directors, plan annual meetings, and establish how to remove officers or directors.

Does a corporation need bylaws?

Many states require a corporation to create bylaws, but some do not. Ask a lawyer, or check the state-by-state requirements to determine if your corporation requires bylaws.

How do you write a bylaw for a corporation?

Bylaws are usually written by the incorporator shortly after filing their articles of incorporation. Bylaws can also be created by the board of directors as one of their early official actions.

Typically, a Corporate Bylaws document will include:

  • Basic corporate information: company name, address, and location of the headquarters if there are multiple offices
  • Details about the officers and directors that will be leading the company
  • The process for amending and adding to the company's bylaws, or articles of incorporation, should it be necessary
  • The procedure for keeping and managing corporate records
  • What types of stock classes will be offered by the corporation

Are articles of incorporation and bylaws the same thing?

No, they are not the same thing. An Articles of Incorporation document establishes the existence of a corporation and includes information such as the name of the corporation, name and address of the registered agent, type of corporate structure, and number and type of authorized shares.

On the other hand, bylaws define your business' structure and specify how the corporation will conduct its affairs by outlining how meetings will be conducted, how directors will be elected, etc.

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