Bylaws in United States

Plain-English Law

Bylaws as defined by Nolo’s Encyclopedia of Everyday Law (p. 437-455):

The rules that govern the internal affairs or actions of a corporation.

Practical Information

Note: Some of this information was last updated in 1982

The rules adopted by a corporation (in U.S. law) for its own government and that of its stockholders, directors, and officers. Bylaws are permanent and continuing, except for the changes that may be made by amendment. The general corporation law of each state usually empowers the corporation to govern its internal affairs by bylaws and prescribes a method for their adoption and amendment. When either the corporation law or the certificate (in U.S. law) of Incorporation describes the manner in which bylaws should be adopted, they must be adopted in that prescribed way or they will not be valid. Ordinarily the corporation may change its bylaws at will, provided the amended bylaw is (1) consistent with law, (2) consistent with the certificate of incorporation, (3) consistent with reason, (4) capable of being complied with, and (5) not volatile of the rights of stockholders.

Preparation of bylaws

Like the certificate of incorporation, the bylaws usually follow a more or less routine pattern. The memorandum usually includes the following information: 1. Place of stockholders’ meeting,

2. Day and hour of annual meeting of stockholders,

3. Time when notice of annual meeting of stockholders must be given (usually ten days before meeting),

4. Who may call special meetings of stockholders (usually president, vice president, or upon request of two directors or holders of 25 percent of the outstanding stock),

5. Time when notice of special meetings of stockholders must be given (usually ten days before meeting),

6. Percentage of stock that constitutes a quorum (in U.S. law) (usually a majority),

7. Place of directors’ meetings,

8. When regular directors’ meetings are to be held,

9. Time when notice of regular meetings of directors must be given (usually three or five days before the meeting),

10. Who may call special meetings of directors (usually president, v/ice president, or upon request of two directors),

11. Time when notice of special meetings of directors must be given (usually three or five days before the meeting),

12. Number of directors to constitute a quorum (usually a majority),

13. Officers who are to sign and countersign checks,

14. Officers who are to sign and countersign stock certificates,

15. When the fiscal year of the company ends.

(Revised by Ann De Vries)

What is Bylaws?

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Bylaws in State Statute Topics

Introduction to Bylaws

The purpose of Bylaws is to provide a broad appreciation of the Bylaws legal topic. Select from the list of U.S. legal topics for information (other than Bylaws).

Bylaws and Corporate Law

This section provides basic coverage of Bylaws in relation to U.S. state and federal corporate law. For comprehensive coverage, please visit the main entry.

Resources

See Also

• Corporate Law

Resources

Further Reading

• Information about Bylaws in the Gale Encyclopedia of American Law.