5 guidelines to follow when writing your corporate bylaws

Corporate Bylaws are a set of rules that outline how a corporation will be governed. They are typically drafted and ratified shortly after the Articles of Incorporation are filed with the state. The majority of states also require a copy of an organization’s Corporate Bylaws. These rules outline the entire structure of the company from shareholders’ voting power to the election of the board of directors.

What to keep in mind when drafting your corporate bylaws

Corporate Bylaws are legally binding; therefore, you will want to thoroughly review the contents. Here are five guidelines to follow when writing your Corporate Bylaws:

• Check individual state laws

Thirty-five of the fifty states require Corporate Bylaws to be created and kept with your records. Regardless of whether your state requires this document, it is always a good idea to create a set of Corporate Bylaws.

• Be specific & thorough

Bylaws should contain the legal name and purpose of the organization, as well as the location of the corporate headquarters and any additional office locations. It should outline the voting rights of shareholders, the date, time & location of the annual meeting, how board members are elected, how committees are formed, and how executives are appointed.

• Include a conflict of interest provision

If a board member has a direct financial interest in an issue up for vote, then he or she should immediately declare the conflict and refrain from voting.

• Outline amendment procedures

While some rules may make sense now, they may need to be altered down the road. There should be a clear procedure for proposing an amendment and ratifying an amendment.

• Have an attorney review the document

Having an attorney review your Corporate Bylaws now will save you time and money down the road.

Are your Corporate Bylaws in order? Don’t hesitate to download a free example to be sure to write them properly.