Why does a corporation need bylaws?

The short answer is that the bylaws of a corporation define the internal workings of the corporation. How many directors will the corporation have? What are the titles of the officers and how many offices will be held by the same person? When will stockholder meetings occur and how will the meetings be called. How will notices be communicated to stockholders? How will indemnification of officers and employees be governed? Will officers, directors and employees be entitled to have their expenses of litigation be advanced by the corporation prior to the culmination of the litigation?

These and other important issues are addressed in the corporation’s bylaws.

Sections 108 and 109 of the DGCL mandate the adoption of bylaws.

Without the adoption of bylaws, a corporation is not properly organized. Simply holding a certificate of incorporation is not sufficient to organize a corporation, it is simply the first step.

Delaware Corporate Agents, Inc., sells a form of bylaws applicable to most for profit  and a separate form for not for profit corporations. If your corporation has elected Subchapter S status under the US tax laws, you should consider Delaware Corporate Agents, Inc., form of bylaws with Subchapter S protections so as to avoid the unintended termination of Subchapter S status.


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