There are a variety of different requirements that you have to keep track of when you establish a business. And you will have a few other obligations added to your plate if you form a corporation, such as creating bylaws. Most states in the US require corporations to retain bylaws, so you would most likely need to write bylaws if you are considering establishing an S- or C-corporation.
So, what exactly are bylaws?
The rules a corporation sets are known as bylaws. During the time the corporation is being created, they are created by the board of directors. This process is called incorporation, and creating corporate bylaws would be one of the first tasks of this new corporation. The written bylaws instruct organizations on how to deal with any challenges or circumstances that might occur. Having bylaws in effect would save the wasted time for trying to sort out the company issues. It will also help to keep things going smoothly and identify priorities or objectives.
When are bylaws needed?
Bylaws are developed to explain how officers are elected, the aim of the organization, and other fundamental issues relevant to the operations of the group. When an organization is going through a transition related to its purpose or how the organization works, they are often written. They will need to be changed or amended if applied for non-profit status.
Board of directors
When the corporate bylaws have been drafted by the committee of the board of directors or the corporate directors, the board has to approve them. They are part of the corporate records and must be placed so they can be accessed by the Internal Revenue Service, the state, or any entity that may want to inspect the records of the organization.
What can I use bylaws for?
The bylaws of your business set out what your organization in a certain case can and can not do. Your bylaws are basically a manual for how your organization should be run and managed. It’s possible to use bylaws to:
To settle conflicts
To decide matters
Teach new directors and officers
You should not leave them on a shelf to rot away or forget, since they contain such valuable details about running your business.
Your bylaws should include information that is current and correct. To review the information and keep the bylaws document up-to-date, we recommend that you periodically review the bylaws at least once every year.
As defined in the bylaws, one of the most significant aspects of the board is enacting resolutions. Resolutions are decisions that will be taken by the board. They must be in a very particular format and documented in the minutes of the board meeting.
The bylaws contain instructions for amending the provisions therein. At regular meetings of the board, standard corporate bylaws are amended. The bylaws set down notice requirements relevant to amending them. Both shareholders and the board of directors must be informed following the bylaws.
Difference between Articles of incorporation and bylaws
Your bylaws and incorporation papers go hand in hand. Articles of incorporation provide information about the business, including the positions of managers and stockholders in the corporation.
Articles of incorporation shall mainly include:
The names and addresses of directors and officers
Business purpose statement
The amount of stock shares your business can issue
While incorporation articles share similarities to bylaws, they are not the same. After you form your corporation, however, you have to register with your state and create your bylaws. You must have a board of directors after you form your corporation. Your small business bylaws will then be decided by your board of directors.
You must file the articles of incorporation with your state when you start your business. If your organization does not apply for non-profit status, you do not have to file your bylaws with the state generally.
Hiring an Attorney to write Bylaws
A business law attorney will assist you if you have already incorporated your business or are about to, by writing corporate bylaws that include specific guidelines on how your business will function, specify procedures for making important corporate decisions, deal properly with context state corporation law and determine how any conflicts between owners and officers—will be handled. If you are looking for an experienced lawyer in Florida to write bylaws, the attorneys at the Private Corporate Counsel Firm in Florida will effectively draft bylaws for your business.