Corporation Bylaws are the laws established by a newly formed corporation that state how the corporation will be run during its operation. These laws set the standards for what the corporation can and cannot do during its operation as a business entity. Corporate by-laws are usually not required to be filled with any state agency like the Articles of Incorporation. Verify the requirements with your state's Department of Corporations. You will need to keep the Bylaws available to present to investors, loan officers or other potential business partners. When your company is establishing credit with vendors your bylaws may be requested.
- Corporation Bylaws begin with the proper name of the entity and all the corporate officer information. This information is very important. You must disclose the official name of the corporation, any DBA information and any related legal issues with that name such as fictitious name filings. Corporate officers should be disclosed including their full names, mailing addresses, position and percentage of ownership in the corporation. President, Vice President, Secretary/Treasurer should all be included.
- Next you must list the operating procedures that your company will keep. This will include accounting methods (cash or accrual) and accounting periods such as January first through December thirty first. You must list what types of stock shares have been issued and how many are available and whether or not more can or will be issued in the future. You must also state in this section whether or not these initial stocks possess any monetary or other value. If this is something you are not sure about, consult a professional.
- You will also need to include the system for corporate record keeping that will be used. Included in this is the frequency of share holder meetings, location of these meetings and what must be accomplished at each of these meetings. You must set rules to govern the way corporate records can be accessed and finally you must put into the bylaws what actions need to be taken by the corporation to amend, remove or add any new bylaws.
This may seem like a lot of work at first but it is a necessary step to take to run a professional corporation. These bylaws will be the governing factor of many decisions that your corporation faces. Lenders, creditors and other entities that you will interact with will find your business to be on a more professional level for having these bylaws available.