South Carolina Corporate Bylaws
South Carolina corporate bylaws dictate the operating standards and procedures that the corporation will follow. At their essence, bylaws act as a corporation’s road map for handling issues like conflicts of interest, shareholder meetings, appointing a board of directors, potential lawsuits, and even amending the bylaws themselves.
Unlike your South Carolina Articles of Incorporation, your bylaws are compiled in an internal document, which means they don’t need to be filed with the Secretary of State. Does this mean you don’t have to write them? Absolutely not. Bylaws govern how your corporation will operate, and without them your corporation opens itself up to potential penalties and lawsuits. Northwest provides a free, attorney-drafted corporate bylaws template specific to South Carolina corporations.
Why do I need corporate bylaws?
Well for one, South Caroline requires them, and two, corporate bylaws help ensure a corporation runs smoothly and efficiently. Don’t believe us? Peep these three reasons why bylaws are important.
1. Corporate bylaws are legally required in South Carolina.
According to S.C. Code § 33-2-105, corporate bylaws are legally required for South Carolina corporations, and shall be adopted by the incorporators or the corporation’s board of directors at the first organizational meeting.
2. Corporate bylaws establish the rules and roles within your corporation.
You wouldn’t go on a road trip without GPS or a map, right? Corporations are hard enough to run without a well-articulated plan. Your bylaws establish key rules and regulations that govern the corporation’s day-to-day operations.
3. Corporate bylaws prove that your business is a legitimate corporation.
To start, you’ll need to open a bank account for your corporation, and to do that you’ll need to present a copy of your formation documents, including bylaws. Want a business loan? You need bylaws. Need a line of credit? You need bylaws.
Beyond that, your bylaws tell people, including courts, that your corporation is serious about doing business the legal way. If your corporation ever gets sued, adhering to your bylaws will show that your corporation is entitled to liability protections.
What is included in South Carolina Corporate Bylaws?
Corporate bylaws are the internal rules of your corporation. Bylaws should include information about your corporation’s management structure, finances, and principal place of business. Your bylaws can include any rule for your business that doesn’t violate your articles of incorporation or South Carolina law, but they should address these topics:
- Company purpose
- Corporation name and office location
- Record keeping
- Officers & Directors
- Number and type of stock shares
Who prepares the bylaws?
As stated by S.C. Code § 33-2-106, the “incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.” Since bylaws are full of legal jargon, corporations often consult an attorney before finalizing them. Our free, attorney-drafted bylaws template can help you get started.
Are corporate bylaws legally binding?
Yes. Even though they aren’t filed with South Carolina’s Secretary of State, your corporate bylaws are legally binding for all officers, directors, and shareholders. Operating outside of your corporate bylaws could endanger your corporation’s asset protection or have other unpleasant legal consequences.
Are bylaws filed with the state of South Carolina?
No. Bylaws are internal, which means you don’t have to file them or pay any fees to the state. Bylaws should be kept with the rest of your corporation’s important business records, as they may need to be disclosed to potential investors, creditors, and other entities with whom your corporation does business.
Do bylaws need to be signed?
No. Your bylaws don’t need to be signed to make them legal. However, a signature carries weight and shows that the board of directors and officers actually agreed on how the corporation would operate. At Northwest, we recommend that all directors and officers sign the corporate bylaws.
How do I amend my bylaws in South Carolina?
In accordance with S.C. Code § 33-10-200, “a corporation’s board of directors may amend or repeal the corporation’s bylaws,” unless the articles of incorporation state that only shareholders may amend bylaws. Your bylaws should have a section that establishes how the bylaws will be amended in case you need to, you know, amend them.