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What are corporation bylaws?
Corporation bylaws are the internal terms and conditions that outline how a corporation is structured, managed, and operated. Despite its non-mandatory nature, the bylaws become one of the most important documents the corporation creates, serving as a foundation for corporate governance. 98% of all corporations created in the U.S. have at least a simple sample corporation bylaws template in place.
While bylaws are not filed with the secretary of state, they are legally significant because they define the following important information:
- roles and responsibilities of shareholders, directors, and officers;
- how, when, and by whom regular meetings are being held;
- amendment procedure of bylaws;
- how the corporation makes major decisions, etc.
A template for corporate bylaws shall not be confused with a shareholder agreement. The latter document defines the cooperative framework between shareholders of a company. This framework includes limitations related to the sale, donation, and purchase of shares, distribution of profits, the company’s dissolution, etc. Contrary to that, a corporate bylaws template is a broader document and does not focus its attention on shareholders solely.
Who could use this sample bylaws for a corporation?
This company bylaws sample is helpful for:
- corporate secretaries;
- founders of S-corporations and C-corporations in the U.S.;
- corporate attorneys.
What to include in a corporate bylaws template?
A corporation bylaws template is a non-mandatory corporate document. As a result, this document has a flexible structure. Shareholders are free to define any terms and conditions for appointment, election, meetings, and daily operation of a corporation’s various governing bodies, including shareholders’ meetings. A standard list of clauses includes the following:
Information about the Corporation
This section of every corporate bylaws sample states a corporation’s name, registered address, and state of incorporation. If shareholders wish so, they may also include information about a corporation’s state registration and registration number.
Besides that, every template for bylaws for a corporation must state its purpose. If there is no specific purpose, it is enough to simply state that the corporation plans to participate in all permitted lawful activities. If, however, there is a specific purpose, it is better to name it directly in the text of a document.
Shareholders
Another key selection of every sample corporate bylaws template is shareholders’ meeting. Thus, the text of a document shall reflect:
- Information about annual meetings. The text of corporate bylaws must state the necessity of having at least one annual shareholders’ meeting per year. If shareholders wish so, they could even select the exact day and month on which the annual meeting should take place each year.
- Meeting Notice. This is a period of time within which all shareholders should be notified about the upcoming meeting. The usual notice period is between 10 and 30 days, depending on the number of shareholders.
- Proxy Attendance. A good corporate bylaws example shall define if a shareholder has a right to participate in shareholders’ meetings via attorney or other representative.
- Quorum. This is a minimum number of shareholders who must participate in a meeting to adopt any decisions. If there is no required quorum, the meeting cannot adopt any decisions, and another one should be called.
- Decisions without Meeting. A template for corporate bylaws could also address if shareholders can adopt decisions without holding a formal meeting.
Directors
The board of directors is an internal corporate body that is responsible for the general management of a corporation’s affairs. A corporation can appoint one or several directors (in this case it is being called a board of directors).
A template for corporate bylaws shall provide the following details regarding a director’s appointment:
- number of directors;
- duration of an appointment (indefinite or for a defined period of time);
- quorum for board of directors meetings;
- whether directors are being compensated for their work or not; and
- grounds for a director’s resignation (e.g., retirement, death, breach of confidentiality, etc.).
Officers
The officers are a corporation’s employees who are responsible for specific daily tasks related to the organization and management of a corporation. The list of officers could include the CEO, secretary, treasurer, vice presidents, etc.
In this regard the text of a corporate bylaws template shall record:
- the list of appointed officers (i.e., names of positions);
- brief description of main duties for each position;
- duration of appointment for each officer.
Additional Information
Every sample corporation bylaws template shall address the additional elements below:
- Amendment Process. The text of a document must answer who and how can change provisions of corporate bylaws. As a rule of thumb, the board of directors and shareholders normally have the right to do so, provided the required minimum quorum is met.
- Corporate Seal. If a corporation plans to use a corporate seal in their business and commercial activity, this information should be reflected in the company bylaws as well.
- Fiscal Year. A template for corporate bylaws shall also define the exact date and month on which a corporation’s fiscal year ends. This is essential for internal tax and accounting purposes.
How to customize a corporate bylaws form at FasterDraft?
To get a fully customized legal document template, follow the instructions given below:
- Click the “Create Document” button.
- Answer simple questions in the form.
- Select a template’s format—corporate bylaws sample PDF or Word.
- Make a payment.
- E-sign, download, print, and use the document.