Jump to Section

Need help with a Bylaws?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

Bylaws are a vital component of organizational governance. You can think of them as the machine by the product that ensures the organization meets its legal obligations. Whether your state or location legally requires bylaws, you should draft a personalized document since they can help your organization handle disputes, concerns, or questions as they arise in the future.

This article outlines the basics of bylaws, including the different types, what’s typically included, and much more.

What are Bylaws?

Bylaws are legal documents that organizations use to define the legally binding rules a corporate or nonprofit board of directors uses to operate. They address critical issues, such as quorum requirements, board member terms, annual meetings, and other top-level administration issues.

Many organizations choose to follow the rules of parliamentary procedure when defining and governing rules surrounding annual, executive, and special meetings.

You can learn more about bylaws by checking out this web page .

Purpose of Bylaws

The purpose of bylaws is to establish the set of rules that govern an organization’s internal operations with board members . Bylaws can address dividends, administrative functions, and board composition. Additionally, they contain information about the company’s share capital, location, and nature of business.

Historically, bylaws date back to the inception of commercial operations, when the prerequisite for operation focused on establishing goals, powers, resources, and legal plans.

A common mistake made when forming a business is not paying enough attention to the wording of bylaws, with some organizations even copying and pasting a boilerplate template that is unlikely to meet the legal situation. Ensure that you consider the different bylaws available and standard provisions to avoid this oversight.

Types of Bylaws

There are two types of board bylaws, including corporate bylaws and nonprofit bylaws . Board bylaws are legal documents that an organization uses to establish its internal management structure by outlining the rules and responsibilities of shareholders, directors, and officers. They establish meeting procedures, create voting rights, and define officer positions and responsibilities.

Organizations can amend bylaws to meet the organization’s needs. Generally, any amendments must be approved by the Board of Directors regardless of whether the organization is a corporation or nonprofit.

The two different types of bylaws are described below :

Meet some lawyers on our platform

Samuel R.

5 projects on CC
View Profile

Cory B.

2 projects on CC
View Profile

Bryan B.

40 projects on CC
View Profile

Ryan W.

8 projects on CC
View Profile

Corporate Bylaws

Corporate bylaws establish the structure and operation of your S Corp or C Corp . Many states even require them. They are beneficial as they eliminate uncertainty and ensure that board members and directors follow all legal formalities.

Nonprofit Bylaws

Nonprofit bylaws are the legally binding rules that govern the organization. They define the organization’s structure and direct the Board of Directors . Bylaws are essentially a nonprofit organization’s operating manual and follow Robert’s Rules of Order.

What’s Typically Included in Bylaws?

Your organization’s bylaws are private, internal documents that you don’t file with the Secretary of State’s Office, contrasting the Articles of Organization . Regardless of filing requirements, you cannot legally operate a corporation or nonprofit without bylaws in most states.

Boards of directors typically include the following terms in bylaws :

Term 1. Mission Statement

Your mission statement should encompass all facets of your business and its unique offerings. Essentially, it’s a statement of purpose explaining what your company fulfills in its market. This element is critical if you are a nonprofit corporation since it affects your ability to obtain tax-exempt status.

Term 2. Members

Member terms address corporate member issues, such as allowable member types, voting rights, and procedures for adding new members. Unless otherwise specified in the organization’s bylaws, a member may be an individual, a corporation, a general or limited partnership , an association, or any other entity.

Term 3. Board of Directors

Bylaws should provide information about the board of directors, including the number allowed, elections, qualifications, and term limits. Your bylaws can also specify the dates, locations, and methods by which your board meetings may convene.

Term 4. Shareholders’ Meetings

The annual shareholder’s meeting is the most critical legal requirement for an organization to uphold. Shareholder meetings may occur at any location approved by your board of directors. This provision should also specify meeting dates, notice of meeting requirements, agendas, and quorum voting terms under the shareholders’ agreement and founders’ agreement .

Term 5. State Requirements

Some states impose highly stringent requirements on shareholder meetings. These requirements will vary depending on the nature of the shareholder meeting and organization. Ensure that you not only consider Robert’s Rules of Order when drafting your bylaws, but you should also check with your local Secretary of State’s Office.

Term 6. Committees

You appoint smaller groups of directors within your board to perform critical tasks on committees. Committees usually comprise of board members convened for specific purposes while attaining the benefit of specialized knowledge, including:

  • Audit
  • Compensation
  • Ethics
  • Executive
  • Finance
  • Fundraising
  • Research

For anyone with experience serving on a board, you know how instrumental these committees are for introducing corporate resolutions to the larger group. Ensure that you allow for special committees to keep your organization running smoothly and welcoming of fresh perspectives.

Term 7. Stocks (Corporate Bylaws Only)

Organizations should not conduct business until shareholders purchase stock. Your bylaws should describe how it will issue them, eligibility requirements, and stock classes. A corporation may offer common and preferred stocks, each with individual ownership rights.

Term 8. Officers

Your bylaws should include provisions for electing and appointing officers, as well as defining their responsibilities. They are responsible for the organization’s day-to-day operations and report directly to the board of directors, including the president, vice-president, treasurer (or chief financial officer for corporations), and secretary. An individual may serve as both an officer and a director and hold more than one office unless otherwise specified.

Term 9. Indemnification

Bylaws should contain a provision indemnifying its directors and officers against any liability incurred due to their association with the corporation. Typically, directors and officers seek indemnification to the maximum extent permitted by law.

Term 10. Conflict of Interest Possibility

Your bylaws should require directors to disclose both actual and potential conflicts of interest for board recusal. This provision is critical as it informs prospective board members of fiduciary responsibility and risk. It also communicates to stakeholders that procedural safeguards are in place.

Term 11. Modifications

Your organization’s bylaws should outline how they can be amended if the need arises vis-à-vis a modifications clause. Most corporations will need to review and amend them over time, especially if specific provisions become obsolete or unenforceable. Ensure that you draft specific rules around modifications so that they are not easily amendable yet not so restrictive that the organization cannot adapt over time.

ContractsCounsel Bylaws Image

Image via Pexels by Christina Morillo

Who Needs Bylaws?

Boards of directors of corporations and nonprofits need bylaws, in addition to their annual report , certificate of incorporation , and other essential legal documents as applicable by law. Bylaws control the operation of administrative work of the organization. As such, seek professional legal help when drafting bylaws so that your organization has a personalized document that functions as intended.

Get Legal Help Drafting Bylaws

If you serve on a board, work as a director, or represent your company as a founder, it’s critical to draft the bylaws that meet your legal needs. Corporate lawyers in your state can help you finalize the perfect documents. Connect with a legal professional today.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Bylaws Lawyers

ContractsCounsel verified
Managing Partner, Attorney
11 years practicing
Free Consultation

Brandon is a Texas Super Lawyer®, meaning he is among the top 2.5% of attorneys in his state. He has designed his practice to provide a unique ecosystem of legal support services to business and entrepreneurs, derived from his background as a federal district law clerk, published biochemist, and industry lecturer. Brandon is fluent in Spanish, an Eagle Scout, and actively involved with the youth in his community. He loves advocating for his clients and thinks he may never choose to retire.

ContractsCounsel verified
Lawyer, Owner
11 years practicing
Free Consultation

Firm rated best ADR firm for Wisconsin and won an award for cultural innovation in dispute resolution from acquisition international magazine in 2016 and it was rated "Best of Brookfield" by Best Businesses in 2015. Attorney Maxwell C. Livingston was rated 10 best in Labor & Employment Law by American Institute of Legal Counsel and 40 Under 40 by American Society of Legal Advocates for 2016; he also won 10 Best by American Institute of Family Law Attorneys. He is licensed in Wisconsin in all state and federal courts, and in the 7th Circuit Court of Appeals, wherein he won a landmark decision in McCray v. Wielke.

ContractsCounsel verified
Senior Partner, Attorney
14 years practicing
Free Consultation

Richard is a wizard at taking on bureaucracies and simply getting the job done. His clients value his straight-forward counsel and his ability to leverage a top-notch legal staff for efficient and effective results. Richard is a professional engineer, professor of law, and has been named among the top 2.5% of attorneys in Texas by the Super Lawyers®. When he is not driving results for his clients, Richard can be found with his small herd on his Texas homestead.

ContractsCounsel verified
6 years practicing
Free Consultation

Experienced attorney and tax analyst with a history of working in the government and private industry. Skilled in Public Speaking, Contract Law, Corporate Governance, and Contract Negotiation. Strong professional graduate from Penn State Law.

ContractsCounsel verified
8 years practicing
Free Consultation

I am an attorney admitted in NY, with over 6 years of experience drafting, reviewing and negotiating a wide array of contracts and agreements. I have experience in Sports and Entertainment, Real Estate, Healthcare, Estate Planning and with Startup Companies. I am confident I can assist you with all of your legal needs.

ContractsCounsel verified
8 years practicing
Free Consultation

Rishma D. Eckert, Esq. is a business law attorney who primarily represents domestic and international companies and entrepreneurs. A native of both Belize and Guyana, she remains engaged with the Caribbean community in South Florida: as a Board Member and General Counsel for the Belize American Chamber of Commerce of Florida, and Member of the Guyanese American Chamber of Commerce. She holds a Bachelor of Laws degree (LL.B.) from the University of Guyana in South America, a Master’s degree in International and Comparative Law (LL.M.) from Stetson University College of Law in Gulfport, Florida, and earned a Juris Doctor degree (J.D.) from St. Thomas University School of Law in Miami, Florida. Licensed to practice in the State of Florida and the Federal Court in the Southern District of Florida, Mrs. Eckert focuses her passion and practice on domestic and international corporate structuring and incorporation, corporate governance, contract negotiation and drafting, and trademark and copyright registrations.

ContractsCounsel verified
18 years practicing
Free Consultation

Mark A. Addington focuses his practice primarily on employment litigation, including contractual disputes, restrictive covenants (such as non-competition, non-solicitation, or confidential information restrictions), defense of wage and hour, harassment, retaliatory discharge, disability, age, religion, race, and sex discrimination.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call