Summary. To write company bylaws, you should first check your state requirements and consult a lawyer to ensure you know all the legal requirements. Your bylaws should include the structure of the board, procedures for meetings, and how amendments can be made. After they are written, bylaws should be passed and then adopted within your company.
At the start of any business, bylaws are created to help clarify rules and policies early on. They help create structure and stability in your new organization. In this article, we will go over what bylaws are, how to write them and provide an example.
Key Takeaways:
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Bylaws are internal rules that guide a business and how it runs.
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Company bylaws should be included in the company’s manual and be easily found in corporate records.
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Check your state for requirements on bylaws.
What Are Company Bylaws?
Company bylaws are the internal rules that guide how a business runs. Company bylaws are typically the first thing to be established by a company’s board of directors at the start of the company. When bylaws are created, it should be done in a formal written document, and it should summarize important procedures related to decision-making and voting.
Company bylaws relate to decisions at a board level and are different from the guidelines in an employee handbook that applies to day-to-day business procedures.
How to Write Company Bylaws
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Check state requirements. Before you start, check your state laws and requirements. Not all states will require a company to create company bylaws.
This is where you will also find the specific requirements for your state that you may have to include in your bylaws. Your state agency may have a template or example that can help you create your bylaws.
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Consult a lawyer. After checking your requirements, consulting a lawyer can help you get started. A lawyer will be able to ensure that your company is complying with all legal requirements. They are also able to help you draft your bylaws.
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Write the bylaws. The board members or owners of the company should write the bylaws together. Some things to include in the bylaws are:
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Purpose of the company. The purpose can include your mission statement and the overall vision and purpose of the company.
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Structure of the board. This section will outline the structure of the board and include things like how many directions, how they are elected, and how they are removed. Other things to include are term length, qualifications, and conflict of interest rules.
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Procedures for conducting meetings. This section should include how often regular meetings are to be held, when special meetings can be called, and policies and procedures for voting. This can also include who may chair the meetings if there is an absence of the chairperson.
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Committee appointments. This section should indicate if there is a committee to make recommendations for certain topics. It should also state how committees are formed and if they can have appointments made.
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Guidelines for selecting officers. Your bylaws should state how officers are elected. This section should include the titles of the officers, the selection process, their roles and responsibilities, and reporting requirements.
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Information on shares and dividends. Depending on the size of your company, you can also include information about the sales of shares and issuing of dividends.
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Other provisions. In the last section, it should include any other information that may be necessary. This could include the signing authority for checks or loans. You should also include the procedures for amending bylaws.
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Pass and adopt the bylaws. The first meeting for the board of directors will be held to approve the articles of incorporation and the bylaws. Once the bylaws are approved, they will be in effect for board members and employees to follow. The bylaws can be amended over time by the board members to meet the needs of the company.
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Put bylaws in the corporate records. Once the bylaws have been written and approved, they should be a part of your corporate or company records. Check state laws to see if they need to be filed with your state agency. Your bylaws should be easily available if they are required by lenders, investors, or the IRS.
Company Bylaws Template
Bylaws of _____________ [Company or corporation name]
Board Members:
Board members of [company name] will consist of six members. These board members shall oversee officers of [company name], and they must only report to shareholders. Any director or board member may be removed with or without cause by the holders of a majority of shares and then entitled to vote at an election of directors during a special meeting.
Corporate Meetings:
Meetings, either annual or special, shall be held in the company’s board room unless directed otherwise. Written notice of any meeting shall be given not less than [minimum number of days] but not more than [maximum number of days] before the date of the meeting.
Annual Meetings: A meeting of the shareholders of [company name] will be held annually for the purpose of electing directors of the company. If the day of the annual meeting is on a legal holiday, then it will be held on the next business day. Corporations must hold annual meeting within the earlier of:
[number of months]after the end of [company’s name] fiscal year
[number of months] after the last annual meeting
If an annual meeting is not held within this time period, any shareholder entitled to participate in the meeting may apply to the circuit court of [county] where [company name] office is located.
Special meetings: Special meetings for any purpose or purposes of the shareholders may only be called the following ways:
By a majority of the board
The president of [company name]
By the holders of the shares entitled to the case in total not less than ten percent of the votes on any issues proposed
Committees:
Committee will generally utilize any specific knowledge by board members to help make recommendations to help solve problems within [company name]. The committees that [company name] has include:
[Committee name]
[Committee name]
[Committee name]
[Committee name]
The members of each committee will be appointed by and serve at the pleasure of the board.
Officers:
Officers will be employees of XYZ Corporation and will oversee the day-to-day operations of the company. Officers positions include:
[Position title]
[Position title]
[Position title]
[Position title]
Officers will hold office until a successor is appointed and will hold the position until the officer’s death or until the officer resigns or is removed. Officers can be removed by the board members at any time with or without cause, provided any contractual rights of that person, if any, will not be prejudiced by the removal.
Policies for Amendments:
Amendments can only be included if a special meeting is called and all [percent needed for approval] of board members vote in unison. Amendments must be provided to each board member in writing [number of days] prior to the special meeting. Once voted and approved, amendments can be incorporated into the Bylaws.
Company Bylaws Example
Bylaws of XYZ Corporation
Board Members:
Board members of XYZ Corporation will consist of six members. These board members shall oversee officers of XYZ Corporation, and they must only report to shareholders. Any director or board member may be removed with or without cause by the holders of a majority of shares and then entitled to vote at an election of directors during a special meeting.
Corporate Meetings:
Meetings, either annual or special, shall be held in XYZ Corporation’s board room unless directed otherwise. Written notice of any meeting shall be given not less than ten days but not more than 60 days before the date of the meeting.
Annual Meetings: A meeting of the shareholders of the XYZ Corporation will be held annually for the purpose of electing the directors of the company. If the day of the annual meeting is on a legal holiday, then it will be held on the next business day. XYZ Corporation must hold an annual meeting within the earlier of:
Six months after the end of the Corporations fiscal year
15 months after the last annual meeting
If an annual meeting is not held within this time period, any shareholder entitled to participate in the meeting may apply to the circuit court of the county where the company’s office is located.
Special meetings: Special meetings for any purpose or purposes of the shareholders may only be called the following ways:
By a majority of the board
The president of XYZ Corporation
By the holders of the shares entitled to the case in total not less than ten percent of the votes on any issues proposed
Committees:
Committee will generally utilize any specific knowledge by board members to help make recommendations to help solve problems within XYZ Corporation. The committees that XYZ Corporation has include:
Executive committee
Finance committee
Fundraising committee
Audit committee
Research committee
Ethics committee
The members of each committee will be appointed by and serve at the pleasure of the board.
Officers:
Officers will be employees of XYZ Corporation and will oversee the day-to-day operations of the company. Officers positions include:
President
Vice President
CEO
CFO
Secretary
Treasurer
Officers will hold office until a successor is appointed and will hold the position until the officer’s death or until the officer resigns or is removed. Officers can be removed by the board members at any time with or without cause, provided any contractual rights of that person, if any, will not be prejudiced by the removal.
Policies for Amendments:
Amendments can only be included if a special meeting is called and all 70% of board members vote in unison. Amendments must be provided to each board member in writing three days prior to the special meeting. Once voted and approved, amendments can be incorporated into the Bylaws.
Company Bylaws FAQ
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Are bylaws included in a company manual?
Yes, bylaws can be included in a company manual. They should be included in the policies and procedures manuals. The policies and procedures manuals are reference tools for managers and supervisors to use when more information is needed to explain a policy.
An employee handbook is for employees to refer to when they need a better understanding of the basic company policies and programs. This should also include acceptable and unacceptable behavior and disciplinary measures.
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Can I change the bylaws of a company?
Yes, you can change the bylaws of a company. To change them, you must do the following:
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Call a meeting. When wanting to make any changes to the current bylaws, you should call a special meeting and gather all the board members. This should be done in person and not over email.
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Propose the amendments. Have a copy of the amendments you want to propose and provide it to each of the board members. Be sure that you are familiar with the current requirements for amendments as stated in the current bylaws.
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Amend the bylaws. After the board members look over the proposed amendments, it’s time for them to take a vote. Once the vote is complete, then you can officially amend the bylaws. This is typically done using your organization’s amendment pages. Include the amendments into the official bylaws and file it away.
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Do corporations need bylaws?
Yes, Corporations need bylaws in certain states. If you live in a state that requires bylaws, then the company needs them to be legally recognized as a corporation. Bylaws are required in the following states:
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Alabama
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Arizona
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Arkansas
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Connecticut
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Delaware
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District of Columbia (DC)
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Florida
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Georgia
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Hawaii
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Idaho
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Illinois
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Indiana
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Iowa
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Kentucky
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Maine
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Maryland
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Massachusetts
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Mississippi
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Montana
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Nebraska
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New Hampshire
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New Jersey
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New Mexico
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New York
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North Carolina
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Oklahoma
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Oregon
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South Carolina
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South Dakota
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Tennessee
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Texas
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Vermont
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Virginia
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Washington
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West Virginia
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Wyoming
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References
Author
Taylor Berman
Taylor is a freelance writer from Pennsylvania. Taylor got into writing because she enjoys writing articles that help people and loves creating stories that inspire. She earned a bachelor's degree in journalism and public relations with an interest in communications media from Indiana University of Pennsylvania.
