Purpose of Corporate Bylaws

Save

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.

Organization Purpose

  • 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.

References

Promoted By Zergnet

Comments

You May Also Like

  • What Is the Purpose of the FAFSA Application?

    A college education is a major step forward for a young person---and a major expense. Many students need at least some financial...

  • What Is the Purpose of a Charter?

    A charter represents a document that describes a project, its rationale, its goals and its participants. The purpose of a charter aims...

  • Corporation Bylaws

    A corporation's bylaws exist as the company's internal rules and regulations that govern the business. Corporate bylaws need to be in writing...

  • Bylaws for an Unincorporated Association

    An unincorporated association is a group of persons forming an organization for a common purpose other than making a profit. Most states...

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!