Part of forming a corporation involves creating corporate bylaws. This document details how your business will operate, what type of procedures it will follow, and provide general guidelines for what it will and will not do during its operational life. In addition, the bylaws will provide descriptions of the duties of the officers and directors as well as how the members will conduct meetings and the procedures for amending the bylaws.
When you form a new business, the bylaws are just one of several documents that you will need to create. Since the process of forming a corporation can seem complicated, it is important to ensure that you are following the legal requirements in Texas. An experienced business law attorney in the Austin area can help you with the various stages of business formation. Read further to find out more about corporate bylaws and why your company needs them.
In general, bylaws are rather far reaching. This is to ensure that as your business grows, the bylaws continue to be relevant and applicable. Usually, bylaws include the company's information including name and address. In addition, it dictates the number of directors and officers that the corporation has authorized to act as agents. The bylaws also detail the type of stock and the number of shares available for issuance. Other covered issues include procedures for record keeping and how to handle conflicts of interests.
Creating the document
The person who initiated the incorporation of the company is usually the person who will establish the bylaws. However, the board of directors can also create the bylaws. During the creation process, the writer tends to start with general information and then get more detailed as the draft forms. For example, people generally start with the company's identifying information and eventually progress to more complicated topics such as shareholder meetings.
No government filing requirements
Unlike the articles of incorporation, which you must file at the state level, the bylaws are an internal document that addresses how directors and officers will govern the corporation. If the company opens up to outside investors or needs to contract with creditors, then you may need to disclose a copy to these stakeholders.
If you are considering starting a corporation, it is important that you meet state and federal requirements. The last thing you want to do is have to spend time amending your filing documents when you are trying to get your business off the ground.