Bylaws are the governing document for your company. The bylaws set forth the rules and guidelines that allow the company to function smoothly. When drafting the bylaws, the incorporators can tailor and customize the bylaws for the company, but certain items should be included in every company’s bylaws. A South Carolina business attorney can help you address the eight things that should be in your corporate bylaws.
8 Things to Include in Your Corporate Bylaws
1. Company Identification
Identify the name and principal location for the company. This section may also include the purpose of the company and any additional locations or offices for the company.
2. Board of Directors
The Board of Directors is responsible for naming officers and overseeing corporate formalities and duties. The bylaws include information about the directors such as the number of directors, how directors are elected, compensation, the term of office, filling vacancies, and removing directors. In many companies, the incorporators name the original directors in the bylaws and the directors adopt the bylaws at the first meeting.
Officers are responsible for the daily operation of the company. The directors name the officers. The bylaws define matters related to the officers, including their roles and duties, the selection process, compensation, and terms of office.
A corporation may have various committees. If so, this section should define the committees, describe their purpose, and include instructions for organizing and conducting committees.
A corporation may have one or more classes of shareholders. The Articles of Incorporation set forth the classes and numbers of shares. The bylaws can add to this information as necessary.
Corporation formalities are important. If a company does not follow corporate formalities, it could lose the liability protections and other benefits of incorporating. The bylaws describe the required annual meetings, who is authorized to call meetings, the notification process for meetings, and other matters relevant to corporate meetings.
7. Conflicts of Interest
There are many ways in which a conflict of interest can arise between people of an organization and the organization itself. The bylaws need to contain a policy for handling and resolving conflicts of interest to ensure that the company’s best interest is protected from the self-interest of those serving or working for the company.
8. Amendments to the Bylaws
A process for amending the bylaws should be included to ensure that bylaws can be updated as the company grows and changes. There should be detailed instructions, including notice of amendments and the votes necessary to pass an amendment.
Contact a South Carolina Business Attorney for Help with Your Corporate Bylaws
The above eight items are not a comprehensive list of items that you might need to include in your corporate bylaws. Your bylaws may need to include several more items to ensure that your company operates smoothly. Also, each section of the bylaws should be detailed and include as much information as necessary to avoid potential problems because of ambiguity.
Detailed, comprehensive bylaws can provide the structure a company needs to flourish. Contact Willcox, Buyck & Williams, PA for more information today. Our South Carolina business attorneys can help you draft bylaws that are customized to your company while satisfying all legal and corporate requirements.