Corporate bylaws is a document created by shareholders to establish the board of directors and how the entity will operate on a day-to-day basis. It is required to create bylaws in 31 states after incorporation.
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- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- Washington D.C.
- West Virginia
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Yes, once the corporate bylaws are signed by the corporation’s board of directors, they become legally binding.
Yes, corporate bylaws can be changed by writing an amendment that is approved and signed by the board of directors.
No, unless the corporation is publicly traded, then it may be shared as part of its public disclosures. A private corporation, which doesn’t have its shares available for public purchase, is not required to be displayed to the public in the United States.
No, even though it is recommended to have the bylaws notarized, there is no statute in any State that requires notarization.
The details about the corporation should be including the entity’s name, principal office address, and contact details. This is to define the corporation for which the bylaws are being written.
The Corporate Bylaws (“Bylaws”) created this [EFFECTIVE DATE], is intended for the corporation known as [NAME OF CORPORATION] (“Corporation”). The Corporation is incorporated in [STATE] by its Articles of Incorporation and other registered documents.
The princicpal office and registered office are located at the most current documentation filed with the Secretary of State or similar office. Any updates to the mentioned offices shall be updated by the Board of Directors.
A corporation has the option to specifically write its business purpose or choose to write a generic disclaimer. An example may include that the entity intends to conduct business activity that is legal under Federal and State law.
The Corporation is incorporated to engage in the following legal activities: [DESCRIBE PURPOSE]. The Corporation agrees to obtain permits (if needed) and adhere any required regulations as part of conducting its business purpose.
The board of directors is a committee appointed by a corporation’s shareholders to run the day-to-day operations. It is responsible for the management, vision, and strategy of the business. In addition, the board appoints a chairman that will act as the CEO or President of the corporation.
Board of Directors.
The affairs of the Corporation shall be managed by its board of directors (“Board”) and elected by its shareholders. The Board shall operate in the following manner:
- Number of Members. The Board shall consist of no less than [#] members and no more than [#] members that can be amended at any time by resolution.
- Term. A member shall be elected to the Board for a term of [#] year(s) and until a successor is elected to replace a removed member.
- Vacancy. Any vacancy, arising from any cause, may be filled by a nomination and vote by the remaining Board.
- Nomination. Any shareholder of the Corporation is entitled to a position on the Board. The Board shall be nominated and voted upon by the shareholders.
- Actions without a Meeting. Certain actions may be taken without a meeting if written consent is granted. Specific actions under this section must be written and agreed to by all the members and the chairman.
Officers are individuals that are appointed by the board of directors that have certain responsibilities related to the business’s day-to-day operations. Examples of officer positions include President, Vice President, Secretary, etc.
Officers shall be elected by the Board for certain responsibilities of the Corporation that must be handled on a day-to-day basis. All appointments of officers are permitted to act only within the duties assigned to them by the Board. The Board, at any time, may choose to remove an officer of the Corporation.
The initial officers of the Corporation are the following:
- Chief Executive Officer (CEO): [PERSON’S NAME]
- Chief Financial Officer (CFO): [PERSON’S NAME]
- Chief Operating Officer (COO): [PERSON’S NAME]
- Secretary: [PERSON’S NAME]
- Treasurer: [PERSON’S NAME]
This references meetings held by the board of directors. As required under State law, corporations must have an annual meeting that is “fixed in accordance with the bylaws.” This is commonly at the start or end of the year with at least 30 days notice beforehand.
- Notice. The notice of any meeting shall be given to each member no less than [#] days before the scheduled date.
- Annual Meetings. An annual meeting shall take place within 30 days after the tax year ends for the Corporation.
- Regular Meetings. Regular meetings shall be held without notice and at any time and place that the Board decides.
- Special Meetings. Special meetings of the Board may be called by the chairman or any 2 members.
- Minutes. Shareholders shall be entitled to a copy of the meeting minutes of any meeting that occurs amongst the Board. Such minutes must include attendees, absences, reports, unfinished business, new business, and any other actions taken by the Board.
A quorum is the minimum number of board members that must be present in order to conduct a meeting, vote on matters, and make decisions for the corporation. Generally, a quorum is a unanimous or majority of the members that are present at a meeting.
A quorum shall be determined by a ☐ majority ☐ unanimous attendance of the Board, which is the minimum number of members that must be present at a meeting in order to make decisions and take action. If less than a majority is present, the members must adjourn the meeting without a decision.
The rights of shareholders are mentioned to give protection to any investor that would like to put money into the business. This clause commonly defines voting rights, classes of shares, meeting notices, and shareholders’ actions.
Each shareholder shall have the right to vote on all matters submitted to a vote. This includes but is not limited to the election of the Board, coporate actions, and similar decisions. A shareholder is entitled to vote at a meeting in person or by proxy via an attorney-in-fact designated in a valid power of attorney document.
A dissolution is when a corporation is dissolved and its assets sold (with such proceeds, if any, to the benefit of the shareholders). This is commonly due to a buy-out of the entity or if the business is not profitable (and shuts down).
The Corporation can be dissolved at any time by a ☐ majority ☐ unanimous vote of the Board. Upon dissolution, the Corporation shall wind up its affairs, pay any outstanding debts and obligations, and distribute any remaining assets to the remaining shareholders in accordance with their ownership interest. If any assets cannot be distributed equally amongst the shareholders, such assets shall be liquidated.