Bylaws of a Corporation

Bylaws are, by definition, the laws or rules governing the internal affairs of an organization. The bylaws are typically adopted during the first corporate Board meeting. There may be revisions made, but the initial Bylaws are necessary as a provision of incorporation. In a corporation, the Bylaws

• Guide the day-to-day activities
• Establish corporate policies
• Establish a schedule for holding Board of Directors and shareholder meetings
• Provide rules of order for running meetings
• Provide the structure used for selecting officers
• Provide guidelines by which stock certificates will be issued
• Provide for indemnification for officers and directors

Books and software programs are available that provide a draft of corporate Bylaws and most corporate lawyers have a set of corporate Bylaws that they start from. It is worthwhile to get a hold of a template before drafting Bylaws. This will indicate how Bylaws should be broken down into individual sections. These individual sections will cover all applicable rules and regulations pertaining to shareholders, the Board of Directors, officers, committees, the use of outside contractors, policy making, corporate actions, etc. The powers granted to Board members and officers and the procedures used in selecting, electing, or removing board members or officers from appointed positions should also be included.

The Bylaws should include details explaining how amendments can be proposed and added in the future. It is advisable to work with an attorney when drafting Bylaws.

Once Bylaws have been drafted and approved, copies should be printed and be readily available in the corporate headquarters.

Bylaws are usually adopted in the first meeting of the Board of Directors; for a complete list, read Initial Actions by the Board of Directors of a Corporation. For a more detailed list of the provisions and benefits of bylaws, read The Bylaws of a Corporation, part of the more comprehensive AllBusiness.com Step by Step Guide to Incorporating a Business.