Hawaii Corporate Bylaws
Corporate bylaws put the rules, processes, and management structure of your Hawaii corporation into writing. They answer important questions for your corporation like how decisions will be made and by whom. Your bylaws should specify how many directors and officers your corporation will have, when and where board and shareholder meetings will be held, and how you will handle conflicts of interest, among other topics.
Unlike the Hawaii Articles of Incorporation, your corporate bylaws don’t need to be filed with the Department of Commerce and Consumer Affairs. But the rules you put in your bylaws will impact every aspect of your business, so you want to get them right. Northwest can help you get on the right track with our free corporate bylaws template, drafted by an attorney just for Hawaii corporations.
Why do I need corporate bylaws?
Every lawful Hawaii corporation will have bylaws. Here are a few reasons you need them:
1. Corporate bylaws are legally required in Hawaii.
Hawaii law mandates that corporations adopt bylaws—per Hawaii Rev Stat § 414-36 (2019). Usually, the board of directors will adopt bylaws at the first organizational meeting.
2. Corporate bylaws establish the rules and roles within your corporation.
Your bylaws determine the rules and procedures that will govern your corporation, including what powers your directors and officers will have. Bylaws also establish your processes for holding meetings and voting on amendments.
If you ever need to resolve a dispute, you’ll refer to the policies in your corporate bylaws.
3. Corporate bylaws prove that your business is a legitimate corporation.
Just because you call your business a corporation doesn’t mean people will automatically believe it’s trustworthy. You need corporate bylaws to show others that your company is following the law. Banks require bylaws to open a business bank account—something you need to maintain limited liability. And potential investors and landlords will want to look at your bylaws to make sure your corporation is a safe bet.
If you ever face a lawsuit, the strength of your bylaws could make all the difference in your case. Since all of your corporation’s rules are documented in your bylaws, adhering to your bylaws helps you show that your corporation is a separate legal entity with limited liability status.
What is included in Hawaii Corporate Bylaws?
Hawaii bylaws should include your corporate policies for all important issues, from finances to management. Technically, you can include almost any rule for managing your company in your bylaws, as long as it is consistent with your Articles of Incorporation and Hawaii state law. However, there are a few subjects corporate bylaws should always cover:
- Directors and officers
- Amendments and emergencies
Who prepares the bylaws?
Most of the time, the board of directors prepare the bylaws, often after consulting an attorney. Northwest’s free, attorney-drafted Hawaii corporate bylaws template can help you get started.
Are corporate bylaws legally binding?
Yes. Bylaws are binding legal documents for directors, officers, and shareholders. Breaking the rules in your bylaws could have major consequences for your corporation—including losing your limited liability status.
Are bylaws filed with the state of Hawaii?
No, you don’t have to file your bylaws with the Department of Commerce and Consumer Affairs. Your bylaws should be kept on record with your other internal documents, including meetings minutes and resolutions.
Do bylaws need to be signed?
Not technically. Hawaii law doesn’t specify that corporate bylaws need to be signed. However, Northwest recommends that all directors and officers sign your bylaws, to demonstrate that everyone is committed to your company’s vision.
How do I amend my bylaws in Hawaii?
Usually, the process of amending bylaws is established in the bylaws themselves. Bylaws usually establish the quorum (how many board members or shareholders need to be present for a vote to take place) and what percentage of “yes” votes are needed to pass an amendment.
HI Rev Stat § 414-301 (2019) notes that shareholders and directors may both amend bylaws, unless the Articles of Incorporation state that only shareholders may do so.