Corporation bylaws refer to a document that every corporation should have on file. This document is essentially the constitution of a company. Often drafted by the person who founded the company, this document outlines a business’ purpose and the way it will operate to accomplish that purpose. Corporation bylaws not only outline what a corporation plans to do, these documents also generally outline what a corporation will not do during its time in existence. The individual terms or clauses of the document are also referred to as bylaws.
Corporation bylaws may be required when a business wants to be incorporated. Even when this is not the case, such documents are standard. Corporation bylaws are not usually filed with any government agency, but if they are filed then they are likely to become a matter of public record. In most cases, these documents are used internally and they tend to be used and distributed among private entities such as potential investors or financial institutions.
These documents can be as brief as a single page or they can be very lengthy. Lengthy corporation bylaws are usually an indication that a business is or intends to become very large. The contents of corporation bylaws documents will vary from one corporation to another. There are some items which are generally found in such documents, however. To begin with, the bylaws almost always include a business’ identifying information, such as its name and contact details.
It will also usually outline the rights and powers of individuals involved with the corporation, such as the shareholders and officers. Various sorts of shareholder information is commonly included in the document. This includes the type of shares and the amount that will be made public. Information regarding shareholder meetings, such as the location, frequency, and presiding authority, is likely to be included.
The titles and compensation of officers and the process of amending the bylaws may also be outlined. When bylaws are composed, the intent is usually for the details to apply to the existence of the organization. This is why it is usually necessary to clearly outline how fundamental changes will be handled.
Some corporations may develop their bylaws from scratch. However, it is also common to use software, templates, and samples to compose such documents. There are some instances where it may be necessary to employ an attorney for this task. Regardless of how the document is created or who it is created by, enacting it is usually a group decision. In many cases the board of directors will vote for or against a proposed draft.