While articles of incorporation create the Corporation, the bylaws are a separate legal document which explain how the corporation operates. Despite their importance, all states do not require submission of written bylaws to the state. However, because of how important they are in confirming how the corporation works, SBA requires written bylaws from all corporate entities.
The corporation's bylaws set forth the financial details regarding the company. These agreements should typically include the rules for:
* Voting rights among shareholders
* How the Board of Directors operates, including quorum and voting requirements
* Issuing and transferring ownership interest among shareholders
* How a new owner will acquire stock
* Distribution of dividends and profits
* How the corporation may conduct a purchase, merger, sale, or dissolution
* The process to amend the bylaws
* What happens if an owner dies, goes bankrupt, becomes incapacitated, or gets a divorce
* Financial provisions, including the specific accounting method that will be used and how the LLC will be taxed, i.e. corporation, sole proprietorship, or partnership (depending on how many members)
* The roles and responsibilities of each Corporate Officer