How to Write Corporate Bylaws (Section-by-Section Outline)

Before you start: gather the inputs

Bylaws must be consistent with two higher-ranking sources: your state's corporation statute and your filed articles of incorporation. Have both in front of you before drafting.

Section-by-section bylaws outline

The table below shows a common structure. Article numbers vary between drafters, but most well-organized bylaws cover each of these topics.

Article II: Shareholders

This article governs how owners act. Decide when the annual meeting is held (often a date set by the board), who may call a special meeting, how much notice is given, and what percentage of shares constitutes a quorum. Address proxies and whether shareholders may act by written consent instead of meeting. A record date provision fixes which shareholders are entitled to notice and to vote. Our guide to annual shareholder meeting minutes shows how these rules play out in practice.

Article III: Board of Directors

Set the number of directors (a fixed number or a range the board can adjust), how long they serve, how vacancies are filled and how directors may be removed. Include meeting and notice rules, the board quorum, unanimous written consent and the ability to form committees. Small corporations often have one or two directors; the bylaws should work for that size.

Article IV: Officers

List required and optional officers and their duties. A common setup is a president or CEO, a secretary who keeps the minutes and records, and a treasurer or CFO responsible for finances. Many states allow one person to hold multiple offices. State that officers are appointed and may be removed by the board.

Article VI: Shares and certificates

Say whether shares are represented by certificates or are uncertificated, how transfers are recorded, and how lost certificates are replaced. Require that a stock ledger be maintained. See stock ledger and stock certificates for details.

Articles V, XI and XII: Indemnification, conflicts and amendments

Indemnification provisions are heavily shaped by state law, so they are a good place for professional review. A conflicts article describes how a director with a personal interest in a transaction discloses it and how disinterested directors or shareholders approve it. The amendment article closes the bylaws by stating who can change them.

A faster starting point

If you would rather review a complete draft than write from scratch, customized bylaws can be prepared from your corporation's details.

Step-by-step process

1. Read your state statute's defaults on quorum, notice, voting and director numbers.
2. Review your articles for authorized shares, classes and any governance provisions.
3. Make the key decisions listed in the checklist above.
4. Draft article by article using the outline, keeping language plain and consistent.
5. Cross-check every provision against the statute and articles; remove contradictions.
6. Have it reviewed by an attorney if you have multiple owners, outside investors or unusual terms.
7. Adopt the bylaws at the organizational meeting or by written consent.
8. Store the signed copy in your corporate records book.

When bylaws conflict with the articles or state law

The hierarchy is consistent across states: mandatory state law comes first, then the articles of incorporation, then the bylaws. A bylaw that contradicts the articles is generally ineffective to that extent. If you want a rule the articles prohibit, the articles usually need to be amended and refiled.

Common drafting mistakes

• Copying another company's bylaws from a different state without adapting them.
• Setting a board size or quorum the company cannot actually meet.
• Omitting written consent provisions, which forces formal meetings for routine decisions.
• Contradicting the authorized share numbers or classes in the articles.
• Never formally adopting the bylaws — leaving them as an unsigned draft.
• Amending informally without recording the change.

Adopting the bylaws at the organizational meeting

Bylaws take effect when they are adopted, typically as one of the first resolutions in the initial organizational minutes. The secretary often signs a certificate stating that the attached bylaws were duly adopted on a given date. Later changes are approved by resolution and recorded the same way.