If you are an aspiring businessperson or a newbie in any sort of business then you have to know abut the corporation and its By Laws, which is said to be the guts of the corporation.
In simple terms, a corporation is one of the various forms of a business entity. If you are already deep into the study of business and business law, then you probably know all about this.
However, there may be several particulars, which you are not yet too knowledgeable about. This article aims to delve a little deeper into these certain particulars.
If we do not know about it yet, the corporation is an entity separate from the person or group of persons who are forming it. The corporation has the same legal rights, too under the law. It can also engage in contracts, agreements and claim constitutional rights. However, as much as everybody, the corporation also must pay taxes.
The only difference of a corporation from us, humans, is that corporations get to "live" for up to 100 years, even 200 years and more. Even some kind of corporations is in existence as far back as the time of the Ancient Rome.
Microsoft cannot be known as the first corporation, despite it's having gladiator inclinations towards other corporations.
Nowadays, the creation of corporations are authorized and governed particularly by the state law. The State of New York was the first to adopt laws that authorize the existence or formation or corporations. This was in year 1811. As the other states were formed, the laws that authorize corporate entities also became a customary practice.
As of the present times, every state can authorize the formation of corporations.
In each state jurisdiction, the Secretary of State is the one who have control over the process of incorporation. As much like individuals, corporations are also considered as "residents" of a certain state wherein they retain offices, hire employees, receive mail and do other activities according to the law. Even if a corporation also conducts business operation in other states, they remain on one state where they hold their main operations.
In the state where they are incorporated, corporations are considered as "domestic entities." Meanwhile, in all other states where they may do business operations, they are considered as "foreign entities."
If there is a body and a head, a corporation, like a human being also has the guts. Moreover, what is considered as the guts of a corporation? Its By Laws.
In forming a corporation, most states provide forms to fill up and makes the process becomes relatively painless. However, concerning the corporation's bylaws, a ready - to - fill - up form is not applicable.
Bylaws comprise the technical rules governing the ways and means a corporation must be run. Bylaws are private documents of the corporation and need not be filed with any government office. The objective of the bylaw is to set up how organizational activities like board meetings, voting and sharing of transfers would transpire within the corporation.
In a corporate book, the bylaws are the biggest and most important document in it. The bylaws tend to be straightforward if the corporation has an entity of a single shareholder since the possibility of having disputes may not arise.
However, if two or more shareholders exist in the corporation then the bylaws documents may become a fundamental item since it would detail the voting rights and others.
Here are the following issues tackled in typical bylaws documents:
- meeting of the Board of Directors
- Notice of Meeting Schedules
- Voting Quorum
- Yearly Meetings
- Special Meetings
- Right to Vote
- Rights to Transfer of Share issues
- Members of the Board of Directors
- Bylaws Amendments
- Board Member Removal
Other provisions can also be added into the corporation's bylaws. It is best to discuss the important provisions to a corporate attorney for its legal implications before having it approved and implemented.
For more information about By Laws Preparation and other business law related topics, log on to Los Angeles Lawyers .