Drafting bylaws for your business

| Jan 25, 2021 | Business Law

Although Louisiana does not require bylaws for new businesses, this document can help company operations run smoothly. Generally, bylaws include information about the company’s organizational structure, policies and financial details.

Review the important components to include in your bylaws when starting a new enterprise or corporation.

Statement of purpose

This introduction explains everything about your company. Your statement of purpose should explain the firm’s mission and vision, outline your competitive advantage, identify your customer base, and describe your plan to meet your business goals.

Member or shareholder information

If your company has other owners, they could be either members or shareholders depending on your chosen structure. Either way, this section of the bylaws will outline member qualifications, rights and responsibilities. You should include details about voting rights, meeting requirements, disciplinary actions and grounds to terminate membership. In this section, you may also want to list the ownership percentage of each member.

Board of directors and corporate officers

If you plan to establish a board of directors for your company, you should outline the policies and procedures for this leadership team in the bylaws. Corporate bylaws usually indicate the number of board members, qualifications to serve on the board, the election process, term length, and meeting and voting protocols.

Sometimes, the board of directors elects officers to run the corporation. In this case, officer qualification and election information would appear in the bylaws. You would also include the names of the current directors if applicable.

Carefully preparing corporate bylaws that fit the needs of your Louisiana business can shield your company from future disputes and legal issues.