Arkansas Corporate Bylaws
Arkansas corporate bylaws are the rules and policies for important procedures your corporation will undertake, like appointing directors and officers, holding board and shareholder meetings, and handling conflicts of interest, among other things.
Bylaws are internal documents, meaning that unlike the Arkansas Articles of Incorporation, your corporate bylaws are not filed with the Arkansas Secretary of State. Nevertheless, adopting corporate bylaws is a necessary step for incorporating in Arkansas. Unless you’re already a legal expert, you might find crafting corporate bylaws intimidating. That’s why Northwest offers a free attorney-drafted Arkansas corporate bylaws template to get you going.
Why do I need corporate bylaws?
Bylaws aren’t just annoying paperwork. They’re essential for every Arkansas corporation. Here’s why.
1. Corporate bylaws are legally required in Arkansas.
According to AR Code § 4-26-809 (2019), the board of directors shall adopt initial bylaws. Usually, bylaws are adopted at the first organizational meeting.
2. Corporate bylaws establish the rules and roles within your corporation.
Your corporate bylaws formalize the rules, structure, and processes of your corporation. Bylaws establish how many officers and directors your corporation will have and what their powers are, along with the rules for voting and when and where board and shareholder meetings will be held.
If there is ever a dispute within your corporation, your bylaws can help you settle it quickly and fairly.
3. Corporate bylaws prove that your business is a legitimate corporation.
Your bylaws signal to others that your corporation can be trusted. You’ll have to show your bylaws to the bank to open a corporate bank account (a crucial step for maintaining limited liability). Also, potential investors and landlords will want to look at your bylaws to make sure your business is credible.
In the case of a lawsuit, your corporate bylaws can reinforce your limited liability protection. Since your bylaws include all of your corporation’s rules and procedures, you can use it to show that your business is a separate legal entity with limited liability status.
What is included in Arkansas Corporate Bylaws?
Any rule for managing and organizing your corporation—as long as it’s consistent with Arkansas law and your Articles of Incorporation—can be included in your bylaws. But generally, bylaws cover:
- Directors and officers
- Amendments and emergencies
Who prepares the bylaws?
The board of directors prepares the bylaws. Since creating corporate bylaws can be confusing for people outside of the legal profession, corporations will often consult an attorney before finalizing their bylaws. Our free, attorney-drafted Arkansas corporate bylaws template can help you get on the right track.
Are corporate bylaws legally binding?
Yes. Violating corporate bylaws can have legal consequences, including your corporation losing its limited liability status. All directors, officers, and shareholders are legally required to abide by the bylaws.
Are bylaws filed with the state of Arkansas?
No. Corporate bylaws are not filed with the Arkansas Secretary of State. Your bylaws should be kept on file with your business’s other documents, like meetings minutes and resolutions.
Do bylaws need to be signed?
No, but we recommend it. Technically, a board of directors could adopt bylaws without including signatures. However, we at Northwest recommend that all directors and officers sign your bylaws to show that everyone in your corporation is in agreement.
How do I amend my bylaws in Arkansas?
Arkansas law includes some rules for amending bylaws. For instance, AR Code § 4-26-809 (2019) notes that for the board of directors to amend a bylaw, the majority of authorized board members must approve the amendment. However, for the most part, rules for amending bylaws are established in the bylaws themselves.
AR Code § 4-26-809 (2019) also states that the board of directors has the power to amend bylaws, unless the Articles of Incorporation state that shareholders and not directors have that power.