Bylaws are legal documents set up for an organization that governs the way it is run. These bylaws outline the rules, regulations, and guidelines of your organization. Oftentimes bylaws are filed at the same time as the articles of incorporation when forming a company.
Typically the board of directors is responsible for implementing the bylaws and establishing them as well. The main goal of bylaws is to protect the rights of the organization and list out the duties of the directors, CEO, stockholders, and committee members.
It is essential to have bylaws because they can help you to run your business efficiently and without conflict. Bylaws can help with elections, nominations, and settling disputes.
Although usually associated with corporations, bylaws often govern partnerships and nonprofit organizations as well. Even societies and clubs generally have bylaws in place as well.
It is good to note that you can change the bylaws after writing them should you need to, but every member, director, and officer should have a copy of the organization’s bylaws at all times.
What to Include in Your Company’s Bylaws
As a Delaware business you are required to include the following in your company’s bylaws.
- An Organization's Name, Purpose, and Location: This will help to introduce your organization, declare where your organization exists, and the goals for the organization.
- Members: This will be for the owners of the organization. It will clearly state who they are and their role in the company.
- Board of Directors: The board of directors governs the organization and ensures that the bylaws are followed.
- Committees: Body of one or more persons that is subordinate to the board of directors.
- Officers: In charge of running the business day to day and are usually appointed by the directors. Bylaws should list the titles of the officers of the corporation.
- Meetings: The board of directors and shareholders must meet at least annually. There should also be special meetings for the directors. The bylaws explain when meetings will be held and the procedure and timeline for notifying the appropriate people of the date, time, and location of the meeting.
- Conflict of Interest: Board members have an obligation to place the company's interests ahead of their own, if conflicts arise, then the bylaws should state how the company will handle this.
How do Corporate Bylaws work in Delaware?
There are a few main potions of bylaws. They are each different depending on the organization but typically have specific sections. These sections outline all of the information about your organization. This not only includes the name and purpose, but why you are in business, and how you plan to reach your goals.
It should also include any methods for when you need to amend bylaws or revise aspects of them. Bylaws can change based on the type of organization you have. Especially if you have a nonprofit organization, bylaws are of even more importance.
Your bylaws are truly a blueprint for how to run and manage your organization. You may also use bylaws to:
- Settle disputes
- Make decisions
- Keep things consistent
- Avoid conflict
- Communicate rules
- Educate new directors and officers
They teach everyone in your organization how the business should be run. This is why they need to contain current and active information.
What is the Difference Between Bylaws and Articles of Incorporation?
Bylaws and articles of incorporation are similar, but not the same thing. The articles of incorporation should include details of the corporation. This includes the roles that the managers and stockholders will play in the corporation.
Articles of incorporation typically include:
- Your business’s name
- Your business’s location
- The names and addresses of directors and officers
- A statement of your business’s purpose
- The number of stock shares your business can issue
The articles of incorporation are similar to bylaws, but they are different. You will be required to file and create bylaws after forming rather than during the process. After you form your corporation, you must establish a board of directors. Your board of directors will then determine your small business bylaws.
Another difference is that when you start your corporation, you must file the articles of incorporation with your state. This is not the same with bylaws unless you are applying for nonprofit status.
How to File Corporation Bylaws in Delaware
In order to file your corporation bylaws in Delaware, follow these 5 steps.
- Drafting your company's articles of incorporation: These need to meet all state requirements and standards of Delaware. You may wish to use the services of an experienced attorney, but you can do it yourself.
- Review your secretary of state's requirements for bylaws: Delaware has certain specifics for bylaw structure and content.
- Prepare a packet: This should include articles of incorporation, bylaws and any incorporation forms your state may require. Be sure to include a check to the state for incorporation and filing fees. There is no fee to file bylaws, as they are not required to be filed.
- Send your packet to the secretary of state's office: Be sure to have it sent to the attention of their corporate records section or division.
- Obtain copies of the articles of incorporation and bylaws with the secretary of state's seal: You also want a letter regarding the creation of the corporation.
As a business owner, it can be overwhelming completing all of the documents on your own while meeting deadlines. If you need help filing your company’s bylaws, an experienced Delaware business attorney can help!
Our experts specialize in corporate bylaws as well as many other required business documentation. Give us a call or contact us online for more information about Delaware corporate bylaws.