Despite the difference in name, LLC operating agreements are legally binding documents that protect business owners and interests. Much like bylaws, the document outlines how the LLC is organized and operated, along with the member responsibilities. LLCs don’t need to draw up corporate bylaws, but some states require an alternative called an LLC operating agreement. Company bylaws for both types of corporations are state-mandated management guidelines that are written to protect the shareholders and the board of directors from liabilities. While S corporations, or S corps, are different business entities than C corporations, they are subject to the same corporate bylaw requirements. However, other types of business entities also have to produce their own bylaws. The IRS considers the C corp as the default standard for corporations. C CorporationsĪ company incorporated as a C corporation, or C corp, is taxed separately from its shareholders, but also retains its profits and losses independently. Not every state requires corporate bylaws, but it’s recommended you have one prepared in case business interests, financial institutions, or legal authorities want to look into your company’s operations. However, a company incorporated in California with more than three shareholders is required to have at least three directors for its board, which must be noted in the company bylaws. However, bylaws do have to address incorporation standards mandated by the state, such as the number of board directors or how bylaws can be amended.įor example, California has no strict specification for what has to be written in corporate bylaws. Most states require that corporations create bylaws, but there’s usually no set criteria or legal requirements for their content. You should use a corporate bylaws template if you plan on incorporating your business.
When Should I Use a Corporate Bylaws Template? In general, most corporations will have both documents. A business’s articles of incorporation are public record which means anyone can look up that information, while corporate bylaws simply explain how the business is run and aren’t necessarily available to the public.īylaws don’t need to be registered in most states, but they need to be kept on company grounds in the event of an investigation or audit.
Having proper bylaws for your company helps ensure that there are no legal or financial complications later on. With a corporate bylaws template, you can draft the guidelines necessary to start your own corporation.