Adoption of Bylaws and Resolutions
Whether the initial meeting of the Board of Directors is undertaken by agreed upon written consent or by an actual meeting with waiver of notice, certain organizational actions must be taken by the directors. These actions are taken in the form of resolutions adopted by directors which relate to the formation of your corporation. Some of the items included in the organizational resolutions will also be included in your corporation’s bylaws.
The Board of Directors holds its first meeting to take certain actions to complete the organization of the corporation. These actions are taken in the form of resolutions at the first meeting of the Board of Directors. If the board of directors has been named in the articles of incorporation, generally they will adopt the initial bylaws of the corporation
Bylaws are the rules and regulations adopted by a corporation for its internal governance. Bylaws usually contain provisions relating to shareholders, directors, officers and general corporate business. Bylaws are a private document not filed with any state authority. Bylaws are more flexible than the articles of incorporation because they are easier to amend.
Bylaws normally cover the following:
General corporate matters
The company’s fiscal year
The size of the board of directors
Duties and responsibilities of directors and officers
Regulation of the transfer of corporate stock
When and how board meetings are called
When and how shareholder meetings are called (including a notice)
Procedures for exercising voting rights
Indemnification obligations for officers, directors, and agents
These Bylaws and can be contained within a single written document. They dictate the operating principles and procedures that the corporation will follow throughout its life as a business entity, therefore are very key when outlining what the corporation can and cannot do.
Here Are Five Reasons Your Corporation Should Adopt Bylaws :
The outside world expects a corporation to have Bylaws; Banks, credit companies, and the IRS expect a corporation to have Bylaws;
The adoption of Bylaws indicates that your corporation takes its corporate responsibilities seriously;
Bylaws provide broad and day-to-day guidance in running your corporation; and
When you adopt Bylaws you have addressed various key issues for the operation of your corporation.
Corporate Resolutions, Bylaws, Company Minutes and Stock Ledger information maintained properly are vital to the continued success and existence of a corporation. They are the unfailing protection of the company directors and shareholders.
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