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Corporate bylaws refer to a corporation’s rules as set by the board of directors as they begin building the corporation. When the process of incorporation starts, one of the first things the founders do is come up with the corporate or company bylaws. These will direct the people who hold the highest positions so they can effectively oversee the corporation from the moment it starts operation.

Do you need bylaws for a corporation?

Any company which forms as an S-Corp or a C-Corp must create company bylaws. In most states, it’s a requirement for the corporation to memorialize its bylaws. Even if your state doesn’t have this requirement, it’s still a great idea to come up with a corporate bylaws template and have it ready in case you need to present it.

Also, this is an important document to have because it contains a lot of important information about your corporation including:

  • The structure of your corporation;
  • The roles of the people in your corporation;
  • How your corporation conducts its affairs;
  • And more.

Creating sample corporate bylaws and following them is also an important aspect of what’s known as corporate compliance. Filing your taxes regularly, keeping corporate minutes, and following the bylaws of your company all give you the chance to come up with your own unique guidelines.

Downloadable Templates:

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What are corporate bylaws and why are they important?

If you have ever seen a corporate bylaws example before, you’ll know that it’s like a formal “game plan” which describes how you will operate and run your corporation. The corporate bylaws also include the authority and the rights of the officers, shareholders, and directors. Although you don’t have to file this document with your state, you should create them and keep them in your own files.

Since there isn’t any “standard” format for a corporate bylaws template, you can make it as lengthy or as short as you want. Although the contents of these documents may vary from one corporation to another, your company bylaws should contain these provisions:

  • The place and time for the meetings of shareholders, officers, and directors;
  • How many directors the corporation will have along with their qualifications and tenure;
  • The titles and compensation details of the corporation’s officers;
  • The corporation’s fiscal year;
  • Who’s responsible for the bylaws and how to amend them;
  • Any guidelines and rules regarding the approval of loans, checks, stock certificates, and contracts;
  • An inspection of the records book of the corporation

Just like other types of corporate documents, you can use templates or sample corporate bylaws as a reference when you create your own. You can also make them from scratch along with a team during the process of incorporation.

What do corporate bylaws do?

As aforementioned, a corporate bylaws example contains relevant information about the organization. You can use it as a reference to direct the way the leaders and the other employee’s function. The bylaws also serve as an organizational map for everyone so that they know their goals and all of the daily operations.

Legally, the company bylaws guide the entire organization. If an employee violates any of these bylaws and there’s a need to go to court, you can bring this document as a reference or evidence. When your corporation has bylaws, these establish and protect the rights of everyone.

Also, if you have bylaws in place, they can help you make decisions on how the nominated or elected individuals should settle any issues that come up between employees or departments. You should amend these bylaws and formally adopt them after you have created them.

Since the bylaws do a lot of things, you need to make sure that they’re well-written. This will guarantee that your corporation operates smoothly as it provides a solution for different kinds of issues which may arise. Although commonly associated with corporations, other companies and organizations can create their own corporate bylaws too.

Is articles of incorporation and bylaws the same thing?

A lot of people confuse company bylaws by “Articles of Incorporation.” But these are two very different things. Bylaws cover information such as how the Board of Directors will elect the company’s officers, how they conduct their meetings, the roles, and responsibilities of the elected officers, and more. Conversely, the Articles of Incorporation is a simple outline of the company.

Articles of Incorporation contain information like the name of the corporation’s organizer, how many shares the company may issue, the names of all the members of the Board of Directors, and the corporation’s location. Another difference is that you have to file the Articles of Incorporation with the state. But just like bylaws, this document can vary from one corporation to another.

What do corporate bylaws look like?

Forming a corporation can be a very complicated process. Running a corporation is even more complicated. Therefore, you need to put a number of laws into place to ensure that your corporation operates at a high professional level and maintains high standards. By creating corporate bylaws, you provide your corporation with an official set of guidelines which everyone needs to follow.

Although it’s not required, this is a legal document which contains significant information. When you go through it, the document will look like a list of rules which define the actions which the members of your corporation can take along with specific guidelines they must follow. Use a corporate bylaws template as your reference then create your own bylaws which apply to your corporation.

What should you include in your corporate bylaws?

Corporate bylaws are one of the most significant legal documents in any organization. The document contains an outline of the daily rules of the corporation and comprehensive rules and guidelines to keep everything operating smoothly.

If any employee wants to see how you organized the corporation or the responsibilities of the Board of Directors, they can check the bylaws. When creating your bylaws, include the basic elements:

  • Your corporation’s name, purpose, and location
    What’s the name of your corporation? State this in your document along with its purpose. This will give anyone who reads the bylaws an idea of why you created the corporation. Also, indicate the specific addresses where your offices are.
  • The members of the corporation
    In this section, include the details regarding the different aspects of membership. This includes the types of members, the process of selecting members, the voting rights of the members, and how to discipline or remove the members.
  • The names of the Board of Directors
    The main governing body of the corporation is the Board of Directors. In this section, you talk about the Board’s composition. Also, talk about how you fill any vacancies whether the Board itself fills the vacancies or through membership. Specify any qualifications of those who can serve on the Board, how long their term lasts, and how the members of the Board get elected.
  • The committees
    If your corporation has any special committees, indicate them in this section. Include information on how they formed, how you appoint them, and all of their specific responsibilities. For instance, an “Executive Committee” should have its own responsibilities which you specify in the bylaws. The same thing goes for other committees like a Nominating Committee, Membership Committee, Audit Committee, and so on.
  • The officers
    The officers include all the members of the Board who have specific responsibilities and functions. In this section, talk about the selection process of the officers, their duties, their authority, and all of their responsibilities. Make sure to list all of these for each of the officers.
    Also, specify in your document any procedures for when you need to remove one of the officers and fill the vacated position. This procedure involves a Nominating Committee as they’re the ones who recommend nominations. Therefore, you should include this information too. Also, you should specify how long the terms of the officers are.
  • The meetings
    If there are any regular, yearly or special meetings which occur, talk about them in your bylaws too. Include the venue and the time of the meetings, any requirements to prepare before informing the Board, members and/or committees, stipulations on attendance, and how many Board members must attend for a quorum.
  • Conflicts of interest
    It’s important to include a provision for the conflict of interest in the bylaws. This protects the corporation from any penalties from the IRS. Corporations may incur such penalties in cases where the IRS discovers that the corporation gives unfair benefits to its members, officers, directors, and other employees.
    For instance, a director shouldn’t get a vote on matters where he has a direct financial interest. If any conflict occurs, the director must report it right away so as not to make the issue worse.
  • Amending bylaws
    Finally, the bylaws should also contain any specific rules and guidelines on how to amend them. This includes who can recommend the amendments and how to vote on these amendments. The bylaws should remain current and should represent the corporation and its membership accurately. Therefore, you must revise the bylaws every five years or so to maintain its relevance.


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