| Sample Bylaws | |
Click here for sample bylaws provided by startupkits.com.
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What to do:
Initial incorporator | |
Unlike articles of incorporation, bylaws can be changed to fit your
needs - as long as the changes do not violate your state's law. The person who initially ratifies these bylaws is called
the initial incorporator. The initial incorporator is generally the person who signed the Articles of Incorporation.
The initial incorporator must decide (subject to later Board of Director confirmation):
- Where your principal office will be.
- How many directors your corporation will have.
- When and where your annual shareholder meetings will be held.
After these three decisions are made, the initial incorporator can prepare the
bylaws. You can obtain bylaws online for under $10, you can use an incorporation book (at your library or bookstore), visit your county law library, write them yourself, or see an attorney. Bylaws contain the operating procedure for governing your corporation and include the information described below. You can amend your bylaws at any time by a majority vote of the shareholders.
The initial incorporator should also complete the Action by Incorporator
minutes to authorize the initial directors and your bylaws. This document is included with the First Board of Directors Meeting
information.
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| Number of directors | |
Directors can be anyone from within or outside the company. Some corporations
include outside directors such as
attorneys, tax advisors, or other business advisors. Outside
means they do not own stock. Other corporations just have
"inside directors".
State law usually requires corporations with:
| 1 shareholder | | must elect | | 1 or more directors |
| 2 shareholders | | must elect | | 2 or more directors |
| 3 shareholders | | must elect | | 3 or more directors |
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| What bylaws need to contain | |
Bylaws usually contain the following information:
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| Office | |
Says where your principal office will be.
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| Board of Directors | |
You will have ______(insert number) members on your Board of Directors.
Describes how
long your Directors will serve (one year), who will conduct Board meetings, and what
constitutes a quorum (a majority of authorized directors). One person has one vote on
the Board of Directors.
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| Corporate officers | |
Describes three officers apopointed by the Board: President, Secretary
and Chief Financial Officer. A Chairman of the Board and Vice Presidents can also be
elected. One person can hold more than one office. But since stock certificates require
the signatures of the President and the Secretary, as a security precaution, the same
person should not hold both offices simultaneously, unless there is only one corporate
director.
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| Shareholder meetings | |
Describes when shareholder meetings will be held, how shareholders
will be notified, what constitutes a quorum for shareholder decision (a majority of
shares entitled to vote) and how votes are to be cast (ballots are not required).
Shareholders can cast one vote for every share that they own.
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| Authorized signature | |
The Board must decide who can sign on behalf of the corporation.
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| Issuing stock | |
Describes how to transfer, exchange or replace stock certificates.
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| Corporate records | |
The corporation must keep books and records, which shareholders and
directors have a right to see. Annual reports aren't necessary.
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| Governing law | |
States that the governing law is (your state).
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| Calculate what makes a quorum | |
To determine what constitutes a quorum, use these numbers in your bylaws:
Board of Directors Meeting: ____people (insert 1/2 number of board members)
Shareholders meeting: representatives for ______ shares (insert 1/2 number of shares issued)
These numbers may change if the number of directors or number of outstanding
shares change.
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| Questions? | |
Contact your attorney.
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