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Company & ownership

What corporate bylaws are for, and how they differ from the articles

Two documents govern a corporation and people routinely confuse them. The articles of incorporation are the filing that brings the company into existence — short, public, and changed only by going back to the state. The bylaws are internal, unfiled, and do the work: they say how a meeting is called, who has to be present for it to count, what a vote carries on, which officers exist and what they may sign. This is what belongs in each, who can change them, and the failure mode of adopting a set nobody ever reads again.

7 min readPublished How we write these

The short version

  • The articles are filed with the state and are public. Bylaws are never filed, are private, and can be amended without telling anyone outside the company.
  • Under section 109 of the Delaware General Corporation Law, once the company has been paid for stock the power to amend bylaws sits with the stockholders. The certificate of incorporation can also give it to the directors — but that never divests the stockholders of it.
  • Bylaws control meetings, notice, quorum, voting, board composition, officers and their signing authority, indemnification of directors, and their own amendment procedure.
  • The order of precedence is statute, then articles, then bylaws. A bylaw inconsistent with the charter does not amend it — it simply has no effect.

Two documents, and only one of them is on the public record

A corporation is created by a filing. Most states call it the articles of incorporation; Delaware calls it the certificate of incorporation. It is short and public — anyone can pull it from the secretary of state — and it carries what the state needs on the record: the name, the registered agent, and the shares the company may issue.

The bylaws are not filed anywhere. They are adopted internally, kept in the company's own records, and seen only by the people the company shows them to. The articles say the company exists; the bylaws say how it decides things.

Which document does what

Articles of incorporation

  • Filed with the state
  • On the public record
  • Name and registered agent
  • Authorised share capital

Both

  • Bind the company
  • Changed only by a vote
  • Requested in diligence

Bylaws

  • Never filed
  • Private and internal
  • Meetings, notice, quorum
  • Officers and their authority
Precedence runs statute, articles, bylaws. Section 109(b) of the Delaware General Corporation Law permits any bylaw provision "not inconsistent with law or with the certificate of incorporation" — so a bylaw contradicting the charter does not quietly amend it. It fails.

Assuming the filing did the whole job is the mistake LLC owners make about the articles of organization — the operating agreement guide covers that side.

What the bylaws are actually deciding

Most of a set of bylaws is procedure, and procedure is what disputes are made of. Every argument about whether a decision was validly taken concerns one of these four regions.

The four parts that get litigated

Corporate bylaws

The last one is what third parties actually rely on. A bank, a landlord and an insurer all ask the same question — is the person signing allowed to sign — and the officers article is where the answer is.

The officers article is worth drafting rather than accepting. A president who can sign anything is a governance problem; one who can sign nothing without a board meeting is an operational one. Set a monetary threshold and a list of matters reserved to the board — the board resolutions guide covers where that line sits.

Indemnification is the article directors should read first

Section 145 of the Delaware General Corporation Law gives a corporation the power to indemnify directors and officers. Under subsections (a) and (b) that power is permissive: the company may indemnify, subject to good-faith conditions, and someone has to decide that it will. Only subsection (c) is mandatory, and it is narrow — a director or officer who succeeds on the merits or otherwise in defending a proceeding shall be indemnified for the expenses actually and reasonably incurred.

That is why the bylaw wording matters. Bylaws saying the company may indemnify leave the question to the board sitting at the time — possibly a board that has just fallen out with the person asking. Bylaws saying it shall indemnify to the fullest extent permitted, and shall advance expenses on an undertaking to repay, convert a discretion into a right. Subsection (e) permits advancement; subsection (f) confirms a bylaw right sits alongside the statute rather than being limited by it.

Who can change the bylaws, and who can change the articles

Delaware sets the pattern most states follow. Before the corporation has been paid for any of its stock, the incorporators or initial directors adopt the bylaws. After that, section 109(a) places the power to adopt, amend or repeal them in the stockholders entitled to vote. The certificate may also confer it on the directors — most do — but the statute is explicit that this does not divest the stockholders. Both can act; neither can lock the other out.

Amending the articles is a different order of effort, because the state has to be told: a board resolution declaring the amendment advisable, a stockholder vote, and a certificate of amendment filed with the secretary of state.

Three ways to change how the company works

  1. Pass a resolution

    Decides something inside the rules you already have. Nothing is amended and nothing is filed.

    A meeting or a written consent
  2. Amend the bylaws

    Changes how decisions get made — quorum, notice, officer authority, board size. Whether the board can do it alone depends on the charter.

    A vote, and no filing
  3. Amend the articles

    Changes the public record: the name, the authorised shares, a new class of stock, anything the state holds.

    Board resolution, stockholder vote, state filing and fee

If the change is about how you decide, it is a bylaw. If it is about what the state holds on file, it is the charter.

Most governance changes need only the middle rung. Companies reach for the top because they assume anything structural has to be filed — and those that never leave the bottom rung end up taking decisions their own bylaws do not permit.

Corporate bylaws template

The full text free to read and copy — meetings and notice, quorum, the board, officers, stock, indemnification and the amendment article, with the numbers left as blanks to fill deliberately.

Open

Are bylaws actually required?

It depends on the state, and the answer is less interesting than it looks. California's Corporations Code section 212(a) requires bylaws where the articles do not fix the number of directors; without them, the acts bylaws would have governed fall to the board under the statutory defaults. New York requires adoption under section 601 of the Business Corporation Law, and Texas under section 21.057 of the Business Organizations Code. Delaware does not compel it in terms, but the whole statute assumes they exist.

Nowhere are they filed, so nobody at the state is checking. The useful question is not whether your state technically requires bylaws, but whether anything in your governance depends on a rule that was never written down.

Why banks, insurers and investors ask to see them

Who asksWhat they are checking
A bank opening an accountThat the person in front of them holds an office that can bind the company, and who may operate the account
A landlord or equipment lessorThe same authority question one level up — whether the signature on the lease commits the tenant
A D&O insurerWhether the company indemnifies its directors, how far, and whether advancement is mandatory
An investor or acquirerQuorum, voting thresholds, board composition, and whether prior approvals were valid under the rules then in force
Only the last reads the document as a whole. The first three want one paragraph — which is why an officers article naming the offices and stating their authority saves more time than any other part of the drafting.

What sits alongside the bylaws in that conversation is a certified resolution and a set of meeting minutes — see what minutes have to record.

The failure mode: a template nobody follows

Bylaws downloaded, signed and never read again are worse than none, because the company is now bound by procedures it does not observe. The examples are consistent: a quorum set at three-quarters of a board that has since shrunk to three, quarterly meetings that stopped after the first year, a vice-president and a treasurer who do not exist, a notice period nobody has met in years.

Each is a live defect. A decision taken without the quorum your own bylaws require is not a decision, and it is usually noticed during diligence on a sale, or in a dispute where the other side is reading the document more carefully than anyone at the company ever has. Piercing the corporate veil has the wider version: a governing document you ignore is worse than one you never adopted.

The pass to make on bylaws you inherited

  • Is the quorum a number you can assemble on a Tuesday, given the board you have rather than the one you planned?
  • Do the officers named in the bylaws exist, and does anyone else sign things who is not named?
  • Does the notice period match how meetings are really called, or does every one quietly rely on a waiver?
  • Is indemnification mandatory or permissive, and is advancement dealt with at all?
  • Does the amendment article say who may amend — board, shareholders, or either — and is that consistent with the charter?
  • Do the bylaws contradict a shareholder agreement signed later? Expect an argument about which governs.

Where practice has moved away from the document, amend the document. That is a bylaw amendment, not a filing — for most companies, one resolution.

LLCs do not have bylaws

An LLC has an operating agreement, and the difference matters. Bylaws are largely procedural, sitting under a corporation statute that supplies most of the substance; an operating agreement is a contract among the members that must carry ownership, distributions and exit as well as procedure. Calling an LLC document "bylaws" is a reliable sign a form was reused from the wrong entity type.

The question to ask about your own bylaws

Not "do we have bylaws" — almost every corporation does, somewhere. The question is narrower: if two directors disagreed next week about whether a meeting had been validly called, would the answer be in the document, and would it be the answer you want? Read the quorum number, the notice period and the amendment article. Those three lines decide more than the rest combined, and they are the ones a template picked for you.

General information, not legal advice. This guide explains how these documents and rules generally work. Law varies by jurisdiction and changes, and none of it is applied to your circumstances here. For anything consequential, consult a licensed attorney where you are.

Frequently asked

What is the difference between bylaws and articles of incorporation?

The articles are the filing that creates the corporation. They go to the secretary of state, become public record, and carry the name, registered agent and authorised shares. The bylaws are internal and never filed; they set out meetings, notice, quorum, voting, officers, board composition and indemnification. If the two conflict, the articles win, and state law overrides both.

Do corporate bylaws have to be filed with the state?

No. Bylaws are an internal document in every US state — they are adopted by the incorporators, directors or shareholders and kept in the company's own records. Nothing is submitted and no fee is paid. That also means nobody at the state is checking them, so errors sit undiscovered until a bank, an investor or an opposing lawyer reads the document closely.

Can the board amend the bylaws without a shareholder vote?

Only if the certificate of incorporation gives the directors that power. Under Delaware law the power sits with the stockholders once the company has been paid for stock, and the charter may confer it on the board as well. Conferring it on the board does not remove it from the stockholders — both can act. Check your own charter, because the answer is written there rather than in the bylaws.

What happens if a corporation never adopted bylaws?

The state's default rules fill the gap, and the board ends up controlling matters the bylaws would have settled. It is not usually fatal on its own, but it becomes visible quickly: banks and investors ask for the document, and any dispute about whether a meeting or a vote was valid has to be argued from the statute rather than from a rule the company chose. Adopting them late is straightforward.

Do bylaws need to be signed or notarised?

Notarisation is not required anywhere. What matters is evidence of adoption: a resolution of the incorporators, initial directors or shareholders adopting them, and a certification by the secretary that the attached bylaws are the ones in force. Keep the adopting resolution with the bylaws in the minute book, along with every subsequent amendment, so the current version can be identified without guesswork.

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