What Information Must Be Included In Corporate Bylaws

Corporate Bylaws are legal documents

Corporate bylaws are set in place to establish how a business or an organization operates. It specifies the following:

  • ownership rights of shareholders
  • procedures in selecting, establishing, and removal of the board of directors and officers
  • planning of annual meetings
  • and issuance of corporate stocks

Other names

This legal document is also referred to as a “Company Bylaws”, “Corporation Bylaws”, or “Bylaws Template”. It also details the roles and responsibilities of the people who manage and own the business.

Who prepares it?

An incorporator or the board of directors prepare the corporation bylaws. This is done after filing the Articles of Incorporation with the Nevada Secretary of State. Although Bylaws can be amended, the process of changing the “Bylaws” is specified within its contents.

Components of Bylaws

    1
    Organization’s Name, Purpose, and Office Location(s)

  1. The Corporate Bylaws should state the following:

    • Name of an organization
    • The aims or purpose for the organization’s existence
    • And the location of the headquarters and other office locations
  2. 2
    Members

  3. This section provides detailed information about the various membership aspects that include:

    • The types of members
    • The selection process of membership
    • Voting rights and procedures for removing or disciplining members

    In cases where members don’t exist, it has to be stated in this section.

  4. 3
    Board of Directors

  5. Role of Board of Directors

    The Board of Directors who are charged with the role of overseeing the senior management and governance of the organization.

    Section Details

    This section also details the following:

    • Composition
    • Selection process
    • Qualifications
    • Duties
    • As well as the length of the term of each member of the board.
  6. 4
    Committees

  7. Special Committees

    This section of the Bylaws details the formation of “Special Committees” which includes the process of formation, nomination, as well as their roles and responsibilities as recommended by the board.

    Different Committees

    Some of the committees in organizations are the:

    • Executive
    • Audit
    • Nominating
    • And Membership Committees.
  8. 5
    Officers

  9. Selection of Officers

    Officers are board members with specific functions within the organization. This section of the Bylaws specifies the selection process, powers, as well as the duties and responsibilities assigned to each of the elected officers.

    Removal of Officers

    This document also details the process of installing, removal, and nomination of officers by the Nominating Committee that recommend nominations to the Board.

  10. 6
    Meetings

  11. All types of meetings for different purposes including regular, annual and special meetings are specified in this section of the bylaws. This indicates:

    • The place and time for the meeting
    • Board notification requirements
    • Members and committees
    • As well as attendance requirements for the board members needed for quorums
  12. 7
    Conflicts of Interest

  13. This section of the Bylaws contains a provision for handling Conflicts of Interest. This is to protect the organization from penalties by the Internal Revenue Service (IRS) in case the agency finds evidence of the company having an unfair allocation of benefits to members, officers, and directors.

    For instance, in cases where a director may have some financial interest in voting for a decision, he or she must be exempted. Given the possibility of a conflict, the director must communicate the matter at once to be excluded.

  14. 8
    Amending Bylaws

  15. Contingencies

    Bylaws should also have contingencies that state the rules and regulations on how the “Bylaws” are supposed to be amended.

    Section Details

    • In this section, the person in charge who can recommend the amendment and the process of how it can be amended is specified.
    • Bylaws are expected to accurately represent the members and the organization, hence, it should be revised every 5 years to be current and up-to-date.
    • All officers, directors, and members should have a copy of the bylaws and it is advisable to consult an attorney for structuring bylaws of the organization.
    • For assistance in establishing your Company’s Corporate Bylaws, you may click on this link to access the Free Nevada Corporate Bylaws Template.

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