If you are a New York business owner or you’re considering starting a company in the near future, then it is important to understand what bylaws are and when you need them. These laws are basically meant to protect parties involved in business transactions as well as those who may be affected by them. Here’s what you need to know.
What are corporate bylaws?
A corporate bylaw is a document that sets out the rules and regulations for governing a corporation in New York. They include rules that manage structure, meeting requirements, stock issuance, roles of directors, corporate officers, employees and any other relevant factor.
The benefits of having corporate bylaws
Having corporate bylaws can offer several benefits to your company. For starters, it can help ensure that all stakeholders are aware of the rules and regulations that govern the corporation. This can be beneficial in the event that there is ever a dispute between shareholders, directors or officers. Additionally, having corporate bylaws can provide clarity in terms of who has authority to make decisions on behalf of the company and when those decisions can be made.
When are they necessary?
The business formation and planning process provides the key determinants of when you need to have a corporate bylaw in New York. For example, if your business is a limited liability company, you must have bylaws to maintain your limited liability status. Furthermore, if you are seeking to raise capital or enter into a partnership with another business entity, then you will likely need to have bylaws in place.
The success of your business greatly depends on how you create and follow the rules governing its structure and management. Your bylaws provide the means to adopt guidelines on how your corporation will operate.
