Corporate bylaws are what could be known as the “owner’s manual” for a South Carolina corporation. They give instructions on how the corporation should properly been managed and many other important pieces of information. The corporate bylaws will describes the roles of the directors and officers, the roles of the shareholders, as well as the mechanics for holding corporate meetings, approving resolutions, and handling all other matters of the corporation. Corporate bylaws differ in length and amount of detail but must contain a minimum standard and include common provisions as required by statute.
Elements and Provisions of Corporate Bylaws Include:
- Provision stating the time and place for officers, directors, and shareholders’ meetings;
- the description of directors, their tenure position, and their qualifications;
- the time and duration of a director’s term and how vacancies will be filled;
- how committees are composed and their role in the organization;
- corporate officers’ job descriptions as well as their compensation;
- identification of the corporation’s fiscal year;
- the parties’ responsibilities;
- the process to amend the bylaws; and
- the rules for approval of contracts, loans, checks, and stock certificates.
In sum, bylaws establish the corporation’s overall structure and should be customized for the individual corporation’s unique needs. In addition to establishing the power of the directors, shareholders, and power of the officers, corporate bylaws also establish how corporate officers and/or directors are to be nominated or elected, and set up how disputes will be resolved. Additionally, corporate bylaws should include a conflict of interest provision to shield the corporation from Internal Revenue Service penalties that may result if the IRS finds the corporation is providing unfair benefits to directors, members, or others; and provisions on how to amend the bylaws, what the process will be, and when amendments may occur.