By–Laws Preparation

By–Laws preparation is significant in order to determine the regulations and processes of operating a corporation. In By-Laws preparation, a committee may be set up in order to put together what the corporate executives have in mind with regards to rules and procedures of running the business.

It is important to know first the definition, functions and components of By-Laws before setting up the proper committee for By-Laws preparation.

By-Laws – puts into view the policies and procedures involved in administering your corporation’s operations and putting into place the functions of its directors and other officers.

The By-Laws is not like the Articles of Incorporation since it is not for public records. Typically, this document need not be filed to any government unit.

After the By-Laws preparation, the final draft will be made effective by the company’s board of directors and adopt them during their first board assembly. It may also be adopted first by the Action of Incorporator before being adopted by the first board of director’s assembly.

Before starting By-Laws preparation, it is recommended to look up the Business Corporation Act of the state governing your company. For your information, every state has a Business Corporation Act that regulates the legitimate processes of corporations and their proper management.

Basic Functions of By-Laws:

1. It serves as a functional reference for the directors, officers and the company legal counsel. They can use it as a guide in verifying their tasks and obligations according to the company’s Articles of Incorporation, the Business Corporation Act and other statutes and regulations of the state.


2. Useful for appending other necessary items not covered in the Business Corporation Act of the state. It can also serve as a variation of what the Act provides.


3. Adopting By-Laws is necessary for every company or organization because it is expected by the other agencies the company or organization will be dealing with. The banks, credit or loan companies and even the IRS count on a corporation with By-Laws.


4. The By-Laws is a statement of the corporation and its responsible individuals’ commitment and dedication. It serves as a general reference on how the company and its people would operate day by day.


5. Careful By-Laws preparation is needed to address every vital issue of operating the corporation.

For proper By - Laws preparation, here are several categories to follow:

• Identifying the corporate offices


• Naming the shareholders


• Regulations regarding the corporation’s Stocks


• Identifying and determination of the Board of Directors


• Setting of Committees


• Identifying the executive officers needed in the corporation


• Determining the indemnification


• Setting up regulations on handling and maintaining records and reports


• Identifying some general matters


• Setting up rules for Amendments

Do you need help in outlining your By-Laws? Our Los Angeles Corporate Lawyers can guide you in practical By-Laws preparation.