Corporate bylaws

Bylaws are the internal rules that govern how your corporation operates on a day-to-day basis. Unlike the certificate of incorporation filed with the state, bylaws are a private document that addresses operational details like meetings, voting, and officer responsibilities.

What are bylaws?

Bylaws establish the framework for corporate governance:

Bylaws are required for all corporations but are not filed with the state. They remain an internal document, though investors and banks may request copies.

Purpose of bylaws

Bylaws serve several important functions:

Define procedures

Set rules for meetings, voting, and corporate actions

Clarify authority

Specify powers and duties of directors and officers

Provide consistency

Ensure predictable governance processes

Support legitimacy

Demonstrate proper corporate formalities to maintain liability protection

What’s covered in bylaws?

Typical bylaws address these key areas:

Stockholder meetings

Rules for annual and special stockholder meetings:

Annual meeting: Time, place, and purpose of yearly meeting
Special meetings: Who can call them and for what purposes
Notice requirements: How much advance notice stockholders need (typically 10-60 days)
Quorum: Minimum attendance to conduct business (often majority of shares)
Voting: Procedures for voting, proxies, and written consents

Many startups skip formal meetings and use written consents instead, which bylaws should permit.

Board of directors

Structure and operations of the board:

Size: Number of directors or range (e.g., 3-7 directors)
Election: How directors are elected and terms of service
Meetings: Frequency and notice requirements for board meetings
Quorum: Minimum directors needed for valid meeting (often majority)
Compensation: Whether directors receive fees or equity
Removal: Process for removing directors
Committees: Authority to create audit, compensation, and other committees

Officers

Roles and responsibilities of corporate officers:

Required officers: Typically CEO, CFO, and Secretary
Appointment: Board appoints officers
Terms: Length of service (often annual or at board’s pleasure)
Duties: Specific responsibilities of each officer role
Authority: Who can sign contracts and bind the corporation
Removal: Board can remove officers with or without cause

Small startups often have one founder serving as CEO, CFO, and Secretary initially.

Stock certificates and transfers

Rules for issuing and transferring stock:

Certificates: Whether to issue physical stock certificates
Transfer procedures: Requirements for transferring shares
Lost certificates: Process for replacing lost certificates
Record date: Setting dates for determining stockholders of record

Indemnification

Protection for directors and officers:

Coverage: Corporation indemnifies directors/officers for legal costs
Exceptions: Limits on indemnification (fraud, bad faith)
Advancement: Corporation advances legal fees during proceedings
Insurance: Authorization to purchase D&O insurance

Indemnification provisions are critical for attracting quality board members. Don’t skip or weaken these.

Amendment procedures

How to change the bylaws:

Board authority: Usually board can amend bylaws
Stockholder authority: Stockholders can also amend bylaws
Protected provisions: Some provisions may require stockholder approval
Notice: Requirements for notice of proposed amendments

When are bylaws adopted?

Bylaws are adopted during your organizational meeting:

File certificate of incorporation

Complete incorporation filing with the state first

Sole incorporator appoints directors

Person who filed certificate appoints initial board of directors

Directors adopt bylaws

Board holds organizational meeting and adopts bylaws by resolution

Directors approve initial actions

Board approves issuing stock, appointing officers, and other setup matters

Bylaws must be adopted before the corporation can conduct business. They’re typically one of the first board actions.

Standard bylaw templates

Several organizations provide model bylaws:

Delaware corporation bylaws

Commonly used templates:

Techstars Model Bylaws: Standard bylaws for Techstars portfolio companies
OpenLaw Bylaws Template: Automated template for Delaware corporations
Cooley GO: Free template available through Cooley’s startup resources
Formation services: Clerky, Stripe Atlas, and others include bylaws in incorporation packages

Most startup bylaws are nearly identical. The certificate of incorporation and stockholder agreements contain the unique provisions.

Bylaws vs. certificate of incorporation

Understand what belongs in each document:

Aspect	Certificate of Incorporation	Bylaws
Filed with state	Yes - public record	No - internal document
Amending	Requires board + stockholder vote	Usually board vote only
Content	Fundamental structure, authorized shares, basic rights	Operational procedures, meeting rules, officer duties
Flexibility	Hard to change, keep minimal	Easy to change, can be detailed
Required by	State law	State law

Delaware practice: Put absolute minimum in certificate, put operational details in bylaws (easier to amend).

Key bylaw provisions for startups

Pay special attention to these provisions: Critical provision for startups:

Any action required or permitted to be taken at any meeting 
of stockholders may be taken without a meeting if written 
consent is signed by holders of outstanding stock having 
the minimum votes needed to approve the action.

This lets you get stockholder approval via email/DocuSign instead of scheduling meetings - much more practical for startups.

Board meeting quorum and attendance

Specify how board meetings work:

Quorum: What percentage of directors must be present (typically majority)
Remote attendance: Allow participation by phone or video conference
Approval threshold: What vote is needed to approve actions (typically majority of quorum)

Director election method

Address how directors are elected:

Plurality voting: Directors elected by highest vote counts
Class voting: If preferred stock has right to elect directors separately
Staggered board: Whether directors serve staggered multi-year terms

If your certificate gives preferred stockholders the right to elect directors, make sure bylaws don’t conflict with this.

Officer roles and authority

Define who can bind the corporation:

CEO/President: General management authority
CFO/Treasurer: Financial management and signing checks
Secretary: Maintaining corporate records and certifying actions

Fiscal year

Set your fiscal year end:

The fiscal year of the corporation shall end on December 31 
of each year.

Most startups use calendar year (ending December 31) for simplicity. Some choose different fiscal years for tax or business reasons.

Amending bylaws

Change bylaws as your company evolves:

Draft amendment

Prepare specific language to add, delete, or modify provisions

Board approval

Board votes to adopt amendment (if bylaws permit board amendments)

Document in minutes

Record amendment in board meeting minutes or written consent

Update master copy

Maintain single authoritative version with all amendments incorporated

When stockholder approval is required

You need stockholder approval to amend bylaws if:

Bylaws require stockholder approval for amendments
Certificate of incorporation requires stockholder approval
Amendment affects stockholder rights (like voting or meetings)
Preferred stockholders have protective provisions covering bylaw amendments

Check your stockholder agreements and certificate before amending. Preferred stock protective provisions often require their consent for bylaw changes.

Common bylaw provisions after fundraising

When you raise investment, bylaws may be amended to add:

Board composition

Specify how board seats are allocated:

Common stockholder-elected directors
Preferred stockholder-elected directors
Independent directors
Observer rights for certain investors

Meeting frequency

Regular board meeting schedule:

Quarterly board meetings
Notice requirements for special meetings
Investor information rights

Committee requirements

Formation of board committees:

Audit committee (if required)
Compensation committee
Charter and composition requirements

Virtual meetings and electronic signatures

Modern bylaws should permit:

Telephonic/video meetings: Board and stockholders can meet remotely
Electronic transmission: Notices via email
Electronic signatures: DocuSign, HelloSign, or other e-signature platforms
Electronic voting: Email or platform-based consent delivery

Post-COVID, remote meeting provisions are standard. Ensure your bylaws explicitly permit virtual attendance.

Maintaining bylaw compliance

Follow your bylaws to maintain corporate formality:

Hold required meetings

Annual stockholder meeting and regular board meetings

Provide proper notice

Send meeting notices per bylaw requirements

Document all actions

Keep minutes of meetings and written consents

Maintain records

Keep bylaws, amendments, and corporate records organized

Failing to follow your bylaws can “pierce the corporate veil” and expose founders to personal liability. Take corporate formalities seriously.

Bylaws and other governance documents

How bylaws fit with other agreements:

Document	Hierarchy	Content
Delaware Law	Highest	Default rules if not specified otherwise
Certificate	2nd	Overrides bylaws and Delaware default rules
Bylaws	3rd	Overrides Delaware default rules
Stockholder Agreement	Special	Contract among specific stockholders
Board Resolution	Lowest	Day-to-day decisions within framework

If there’s conflict: Certificate beats bylaws, bylaws beat Delaware law, and stockholder agreements are contracts that bind only the parties who sign them.

When to update bylaws

Review and potentially amend bylaws when:

Raising venture capital (board composition changes)
Changing board size or structure
Adding board committees
Adjusting officer roles
Expanding notice/consent procedures
Implementing D&O insurance
Preparing for exit or IPO

Common mistakes with bylaws

Never formally adopting bylaws

Problem: Corporation operates without adopted bylawsSolution: Adopt bylaws at organizational meeting and keep signed copy with corporate records

Conflict with certificate

Problem: Bylaws contradict certificate of incorporationSolution: Ensure bylaws align with certificate (certificate wins if there’s conflict)

Not following bylaw procedures

Problem: Ignoring notice requirements and meeting rulesSolution: Follow bylaws or amend them to match actual practice

Losing track of amendments

Problem: Multiple versions exist, unclear which is currentSolution: Maintain single master version incorporating all amendments

Getting help with bylaws

Resources for drafting and maintaining bylaws:

Formation services: Clerky ( $799+), Stripe Atlas ($ 500) include bylaws
Templates: OpenLaw, Techstars, and other free resources
Legal software: CooleyGO, Carta, and other platforms provide templates
Attorneys: Corporate lawyer for custom provisions ($1,500-5,000)

For most startups, standard template bylaws are sufficient initially. Customize when raising serious investment or addressing unique governance needs.

Certificate of incorporation

The foundational corporate document

Incorporation guide

Complete incorporation process overview

Board consents

Documenting board actions

Stockholder consents

Written stockholder approvals

Overview

Founders

Formation

Financing

Business Essentials

What are bylaws?

Purpose of bylaws

Define procedures

Clarify authority

Provide consistency

Support legitimacy

What’s covered in bylaws?

When are bylaws adopted?

Standard bylaw templates

Delaware corporation bylaws

Bylaws vs. certificate of incorporation

Key bylaw provisions for startups

Board meeting quorum and attendance

Director election method

Officer roles and authority

Fiscal year

Amending bylaws

When stockholder approval is required

Common bylaw provisions after fundraising

Virtual meetings and electronic signatures

Maintaining bylaw compliance

Hold required meetings

Provide proper notice

Document all actions

Maintain records

Bylaws and other governance documents

When to update bylaws

Common mistakes with bylaws

Getting help with bylaws

Certificate of incorporation

Incorporation guide

Board consents

Stockholder consents

Build docs developers (and LLMs) love

Overview

Founders

Formation

Financing

Business Essentials

​What are bylaws?

​Purpose of bylaws

Define procedures

Clarify authority

Provide consistency

Support legitimacy

​What’s covered in bylaws?

​When are bylaws adopted?

​Standard bylaw templates

​Delaware corporation bylaws

​Bylaws vs. certificate of incorporation

​Key bylaw provisions for startups

​Written consent in lieu of meeting

​Board meeting quorum and attendance

​Director election method

​Officer roles and authority

​Fiscal year

​Amending bylaws

​When stockholder approval is required

​Common bylaw provisions after fundraising

​Virtual meetings and electronic signatures

​Maintaining bylaw compliance

Hold required meetings

Provide proper notice

Document all actions

Maintain records

​Bylaws and other governance documents

​When to update bylaws

​Common mistakes with bylaws

​Getting help with bylaws

​Related resources

Certificate of incorporation

Incorporation guide

Board consents

Stockholder consents

Build docs developers (and LLMs) love

What are bylaws?

Purpose of bylaws

What’s covered in bylaws?

When are bylaws adopted?

Standard bylaw templates

Delaware corporation bylaws

Bylaws vs. certificate of incorporation

Key bylaw provisions for startups

Written consent in lieu of meeting

Board meeting quorum and attendance

Director election method

Officer roles and authority

Fiscal year

Amending bylaws

When stockholder approval is required

Common bylaw provisions after fundraising

Virtual meetings and electronic signatures

Maintaining bylaw compliance

Bylaws and other governance documents

When to update bylaws

Common mistakes with bylaws

Getting help with bylaws

Related resources