Should Your Corporation Adopt Bylaws?

Bylaws set forth the rules and procedures that govern the operation of your corporation, its officers, and directors. Unlike the Articles of Incorporation, Bylaws are not public records and typically do not have to be filed with any governmental entity. Bylaws will be adopted by your corporation's directors at their first board meeting or adopted by the Action of Incorporator and then adopted at the first board meeting.

Default Provisions

Each state has some form of a Business Corporation Act that governs the lawful operation of corporations and other business entities. If your Bylaws do not cover the basic requirement for operation and management of your corporation, by default, the statutes within your chosen state's Business Corporation Act will.

Function

Bylaws serve two basic functions:

• They provide a useful reference for officers, directors, and corporate counsels to verify that their acts comply with the Articles of Incorporation, the state's Business Corporation Act, and other state laws, rules, and regulations; and
• They provide permissible variances of the state's Business Corporation Act, or addition of items not covered in the act.