When you form a new company, bylaws provide a framework for how your business will operate and how to make decisions. In addition, you may disclose this document to shareholders, potential investors and others with a stake in the company’s success.
Prepare for this important step by reviewing the items to include in your company bylaws.
Information about your company
The bylaws start with your company’s name, principal address and place of business. You should also name the corporate officers and directors. Provide information about your primary products and services, your clients, your business goals, and your competitive advantages.
Within the bylaws, indicate the type and number of stock classes and shares your corporation will offer, if applicable. You should also detail each partner’s financial interest in the company.
Document how and when you will meet with shareholders and directors. Designate a location and structure for the meetings and determine their frequency. Indicate the types of members and shareholders, their voting rights, and how and when you can add new voting members.
Establish a system of keeping records for your corporation. Document who will prepare these records and the procedure for inspecting them. Include information about how the shareholders or directors can change the bylaws when necessary.
Your corporate bylaws will also play an important role in dispute resolution. You can establish a protocol to follow for decision-making and for when a partner wants to exit the business. Planning for these inevitable situations in advance will potentially extend the life of your business.
When you do not have bylaws in place for your business, you must default to state laws if a dispute arises. Carefully review the legal guidelines for the state where you form your business. For example, Florida has specific guidelines for corporate bylaws that you should review. A business attorney can also determine whether your bylaws are in accord with federal and state laws.