Our South Carolina business attorneys can help you draft bylaws that are customized to your company while satisfying all legal and corporate requirements.
Buyck, Jr. Hugh L. Willcox, Jr. Reynolds Williams Mark W. Buyck, III E. Willcox Paula A. Sartor Katherine M. Ryan Blog Contact. Company Identification Identify the name and principal location for the company.
Board of Directors The Board of Directors is responsible for naming officers and overseeing corporate formalities and duties. Unlike articles of incorporation , corporate bylaws are private and do not get filed with any government entity. Even though they are private, bylaws are required by most states for your corporation to legally exist. Corporate bylaws are usually written by the owners of the company. Once approved, the bylaws will become part of the corporate records and must be accessible to the IRS or any other entity that may audit your corporate records.
Even if a company chooses to not have detailed bylaws, at the very least, they need to include the corporations name and identifying information like address and place of business. The corporation should be designated as public or private, and lastly, the bylaws should include the fiscal year of the corporation.
If you live in a state that requires bylaws, then you must have them for your company to be legally recognized as a corporation. However, it is recommended that every corporation adopt a rule structure or corporate bylaws to successfully run the company. Here is an article that goes further into Bylaws. If your business is a non-profit and you are looking to file for tax exempt status, the statement of purpose is especially important. This statement will help determine whether your company qualifies for tax exempt status with the federal government.
The member section of your bylaws will layout the rules for the types of members your company will have, voting rights of the members, and procedures for adding members. Other important membership information includes:. The board of directors of your corporation is a very important part of corporate governance.
The board oversees the officers of the company and because they are usually not employees, only report to shareholders. These rules can include:. Image via Pexels by Christina Morillo. Corporations are required to hold corporate meetings, specifically, an annual shareholders meeting.
In addition to the shareholders meeting, monthly or quarterly regular meetings can be held, and special meetings may also be called. The bylaws will dictate how these meetings are called and noticed, and layout the procedures that will be followed during the meeting. Depending on state in which your company is incorporated, there may be specific requirements that you must follow for the corporate meetings.
If you are unsure of your state business laws, you could consult with a corporate lawyer. Some corporations opt to create committees within their board of directors. Committees will perform specialized tasks for the corporation.
If you choose to have committees within your corporation, your bylaws should include the following:. Committees will generally utilize specific knowledge by board members to make recommendations as to how to solve problems within the company. Some examples of committees that a corporation may form include:. Issuing stock to shareholders should be one of the first orders of business for a newly incorporated company.
The corporate bylaws will detail the number and type of stock classes that can be issued, who is entitled to receive stock, and how stocks will be transferred. Officers are usually employees of the corporation, and they oversee the day-to-day operations of the company and report to the board of directors.
Officers can sometimes be board members, but this needs to be specified in the bylaws. The bylaws will also dictate how officers are elected and appointed and what responsibilities they will have. It protects the rights and responsibilities of your owners, directors, executives, shareholders, and other stakeholders.
They establish processes for elections and for resolving disputes that arise. Bylaws must be formally adopted by a vote of the board and can be changed by amendment. Companies that do not establish bylaws are subject to the state laws governing corporations by default. Corporations can establish their own procedures with bylaws, but some legal statutes are mandatory, while others can be altered.
Bylaws are often required to open a corporate bank account and to purchase some types of insurance policies.
The larger and more complex your company, the larger and more complex your bylaws will be. Bylaws are sometimes confused with articles of incorporation , but these are two different documents with different purposes.
The articles of incorporation are filed with the state where your company will exist and include basic information about the company, including:. Corporations may wish to include provisions for meetings taking place virtually or specify whether directors can take action by written consent if state law allows. The bylaws should also include how many directors must be present to make a quorum.
Typically, a simple majority of directors constitutes a quorum, but the bylaws can specify otherwise. Common committees include executive and nominating committees, but corporations can create any committee in line with its purpose or goals. The board of directors selects officers to manage the daily operations of the company. Most corporations will have a chief executive officer, chief operations officer, and chief financial officer.
Shareholders, or stockholders, are owners of the company who have exchanged assets for shares or stocks. Companies should include information about shareholder meetings in the corporate bylaws, including:.
Depending on state law, corporations can also include provisions for shareholders to take action by written consent. The bylaws should also specify the process by which shareholders can petition for special meetings.
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