Ruggiero Law Blog

Wednesday, July 9, 2014

Are your corporate bylaws in compliance with state laws?

Corporate bylaws are a critical component in the foundation of any corporation, partnership or association. Generally speaking, the bylaws establish the rules for internal operations and governance.  While business owners have a large degree of control when it comes to the bylaws, they must be in compliance with state law. Some states have strict mandates on what information must be included, while others may not specify exactly what must be covered and there may not be a set format. However, there are certain things that are typically covered in a company's bylaws.

Bylaws often set forth what officers the company is to have, what the responsibilities are for those officers, and how they are elected. It will also set forth the term of office such as a one, two, or three year term. Most companies also have a board of directors. The bylaws would also set forth how many board members are allowed or required and their term of office. Most of the time the shareholders will elect the board members, and then the board members will elect or appoint the officers of the company. So, the officers report to the board, and the board reports to the shareholders.

Other matters that are often found in the bylaws include the procedure for notifying the board of an upcoming meeting and the timeline for doing so. In addition, the bylaws can establish the number of board members that are required to be present at a meeting for there to be a “quorum” in order to do business and how many votes are needed for something to be approved. One thing that likely will not be in the bylaws but you might want to consider if there will be multiple owners of the business, is a buy-sell agreement. That agreement would outline rights and responsibilities for each owner and generally would provide the right or option to buy out a one of the co-owners’s shares.

It’s important to consult with a business law attorney to make certain that your bylaws are in compliance with all applicable state statutes. Seek legal guidance to help you identify potential pitfalls and minimize any future risks that might harm your company down the line.


Archived Posts

2019
2018
2017
2016
2015
2014
2013



© 2019 Ruggiero Law Offices LLC | Disclaimer
Paoli Corporate Center - 16 Industrial Boulevard, Suite 211, Paoli, PA 19301
| Phone: 610-889-0288

Estate Planning | Estate Planning/Non-Traditional Families | Estate Tax Planning | Special Needs Planning | Probate & Estate Administration | Elder Law | Veterans Benefits | Guardianships | Business Law | Purchase/Sale of a Business | Real Estate | Pet Trusts | About | Media

Attorney Website Design by
Amicus Creative