In our last post, we discussed Articles of Incorporation. In this post, we discuss a corporation’s bylaws. A corporation’s bylaws are written rules by which the corporation, its officers, directors, and shareholders must abide. They establish how the company is ruled and what are the duties and obligations of its officers, directors, and shareholders. Unlike the articles of incorporation, there is no obligation to file the bylaws with the Nevada Secretary of State.
Most bylaws will contain (remembering that the officers and directors will be legally required to adhere to the standards. Importantly, if they are sued, the bylaws are the standard against which their actions will be judged):
- The general powers given to any corporation by Nevada statute (govern its own affairs, provide for succession, sue or be sued, make contracts, appoints and pay (if desired) its officers and directors, make bylaws consistent with Nevada law, engage in lawful activities, and to wind up and dissolve itself if desired;
- The issuance and allowable method transfer/sale of the corporation’s stock;
- The method and frequency of director, stockholder, and special meetings;
- The number of members of the board of directors, the number constituting a quorum, the number of votes needed for regular and special matters to pass, term limits of board members, removal of board members,
- A statement limiting the personal liability of board members; and
- Method for changing the bylaws (unless the articles of incorporation limit that ability pursuant to NRS 78.120).