What Are Corporate Bylaws and Why Are They Important?
Bylaws are like an official game plan on how a corporation is to be run and operated. Bylaws also state the rights and powers of the shareholders, directors and officers. Ordinarily, they're not filed in any state's corporate filing office. In practice, bylaws can be brief or lengthy. Operating agreements and partnership agreements, the LLC and LLP counterparts of corporate bylaws, are similar requirements. Contents vary but they typically include the following provisions:
- The time and place for meetings of officers, directors, and shareholders;
- How many directors, their tenure, and their qualifications;
- Title and compensation of the corporate officers;
- The fiscal year of the corporation;
- Who is responsible and how the bylaws are to be amended;
- Any rules on the approval of contracts, loans, checks, and stock certificates;
- Inspection of the corporate records book.
Like articles of incorporation, computer-aided programs will assemble and print bylaws. Bylaws can be prepared from scratch or you may use the tear-out forms provided in many published incorporation books.
