What Is the Difference Between Charter & Bylaws?

Each corporation is regulated by the Secretary of State where the corporation is located. A corporate charter describes the corporation's purpose, place of business and officers and is granted by the state. After the charter is authorized, corporate officers draft and sign the bylaws, or the goals and objectives of the company.

Incorporating

A corporation must apply for a corporate charter, a document stating that the corporation has authority to transact business in a given state. Corporations must file the application for the charter (often called Articles of Incorporation) with the Secretary of State to begin the incorporation process.

Corporate Charter

After the Secretary of State approves the paperwork, the state will issue a corporate charter verifying that the corporation has fulfilled all state requirements for transacting business.

Initial Meeting

After the corporation is formed and a corporate charter has been issued, an initial meeting of officers shall occur.

Bylaws

At the initial meeting of the corporation, officers and the board of directors will draft and execute the company's bylaws. The bylaws are written mandates stating how the company will operate.

Records

While the state issues the corporate charter and the company drafts the bylaws, each executed document should be placed in the official company records by the company's designated secretary.

References

• CELDF.org: The Community Environmental Legal Defense Fund
• AllBusiness.com: What Are Corporate Bylaws and Why Are They Important?
• NOLO.com: How to Form a Corporation