Corporate bylaws are the set of rules a company establishes to define how it operates. The bylaws are considered the most important legal document the company maintains, regardless of whether it is a corporation, association or partnership, according to Stephanie Paul at LegalZoom.com.
The bylaws state the name and purpose of the organization. They establish the organization's mission, essentially covering the reasons for its creation and its goals. It further states where the organization is located for operational and legal purposes. The bylaws are an amendable document as long as the initial bylaws state the process of amendment. This means the bylaws can adapt with the ever-changing business dynamic.
Persons of Interest
There are many persons of interest in an organization and the purpose of each must be defined in the bylaws and amended through meeting minutes. The bylaws should first list the board of directors, providing not only names and titles, but also contact information, term length and any relationship to other major players in the organization. The bylaws also establish the officers and committee members.
Conflicts of Interest
The bylaws must also define any conflicts of interest the organization or its employees may have. Conflicts also extend to defining how directors, board members and officers are compensated and whether or not there may be IRS penalties for excess and unjustified compensation. Board members and officers must disclose conflicts, and that may limit voting abilities.