About Corporate Bylaws
If you have decided to operate your business as a corporation, one of the first tasks you will have to undertake is that of writing your corporate bylaws.
Corporate bylaws are written to set the standard for how your corporation will operate. The bylaws are for the express purpose of spelling out exactly what practices and procedures will govern the conduct and culture of your business.
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Identification
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The general format for corporate bylaws includes:
1. Name, mailing address and principal location of business.
2. Names and contact information for all corporate officers and directors.
3. The type of stock that will be issued by the corporation.
4. The number of shares of stock that will be issued by the corporation.
6. Location and frequency of directors' meetings.
7. Location and frequency of shareholders' meetings.
8. Procedure for how corporate records will be handled.
9. Actions to be taken in the event that the corporate bylaws need to be amended in the future.
Considerations
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Unlike the Articles of Incorporation, your corporate bylaws will not be filed with the Secretary of State's office in your state. In fact, they will not be filed with a public agency of any kind. They should, however, be filed in your corporate offices and be readily available for shareholders and investors to review.
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Function
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The Incorporator is the person who initiates the process of incorporation. If that person is you, it is extremely important for you to be as explicit as possible in your drafting of the corporate bylaws.
Make sure that you are clear about the authority of the shareholders, directors and corporate officers, as well as what benefits they are to receive as part of your corporate governance. Your corporate bylaws do not need to be a prescribed length, but you need to be sure that you include every detail relevant to your corporation, even if the bylaws are only on one page. In actuality, they will most likely be at least two pages, but the length of the documents will be entirely dictated by what information you feel is necessary to include.
Effects
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In addition to the items included in the general format of the corporate bylaws (as listed in Section 1 above), you may also find it necessary to include:
1. The fiscal year of the corporation.
2. Who holds responsibility for storing the corporate bylaws and keeping them current.
3. Standard operating procedures related to handling of corporate contracts, corporate finances and stock.
Warning
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Corporate bylaws may never be in conflict with local, state or federal law. If, for some reason they are, the governmental laws will supersede the bylaws.
A corporation technically does not exist until its bylaws have been adopted, so this is a task, tedious though it may be, that you will want to hammer out as early in the process as possible.
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