Virginia Corporate Bylaws
Corporate bylaws are the rules and processes your Virginia corporation agrees to follow, compiled in an internal document. Bylaws determine how your corporation will proceed in a variety of situations, including holding shareholder and board meetings, appointing officers and directors, voting on amendments, and even dissolving the company.
Unlike the Virginia Articles of Incorporation, there is no government form for corporate bylaws. Corporations are expected to draft bylaws themselves, which can be daunting for new business owners. Luckily, Northwest offers a free, attorney-drafted Virginia bylaws template that you can use as a starting point.
Why do I need corporate bylaws?
If you don’t adopt corporate bylaws, your business could face some icky legal consequences. Here’s why bylaws are essential for Virginia corporations.
1. Corporate bylaws are legally required in Virginia.
Per VA Code § 13.1-624 (2019), the incorporators or directors of a corporation must adopt initial bylaws. The law doesn’t specify when bylaws must be adopted, but usually this happens at the organizational meeting.
2. Corporate bylaws establish the rules and roles within your corporation.
It’s stressful to be part of an organization where no one knows who’s in charge. Bylaws make it clear what powers your directors, shareholders, and officers have. For example, your bylaws can state that only shareholders have the power to amend and appeal certain policies. Bylaws also establish basic processes like holding meetings and voting. If you run into conflict, it’s better to settle it internally with the help of your bylaws than to battle it out in a courtroom.
3. Corporate bylaws prove that your business is a legitimate corporation.
Legally sound bylaws show that your corporation is professional and follows the law. Banks, investors, and other business associates will want to look through your bylaws to make sure they can trust you. If your corporation is ever sued—knock on wood—strong corporate bylaws demonstrate that your business is a distinct legal entity following consistent rules, which can help to safeguard your liability protection.
What is included in Virginia corporate bylaws?
VA Code § 13.1-624 (2019) provides some guidance for what corporate bylaws may include, but you’re free to include any rule for your corporation that is consistent with your articles of incorporation and the law. However, corporate bylaws should always address the following topics:
- Meetings
- Stock
- Directors and officers
- Finances
- Records
- Amendments and emergencies
Who prepares the bylaws?
According to VA Code § 13.1-623 (2019), Virginia corporate bylaws can be prepared by the incorporators or board of directors of a corporation. It’s a good idea to consult a legal expert before finalizing your bylaws, but our attorney-drafted corporate bylaws template can be used as a foundation.
Are corporate bylaws legally binding?
Yes. Corporate bylaws are essentially a legal contract that holds up in court. If your officers or directors violate the rules in your bylaws, they can be removed from office. Violating corporate bylaws can also jeopardize a corporation’s asset protection or have other negative legal consequences.
FAQs
Are bylaws filed with the state of Virginia?
No. Even though corporate bylaws are required in Virginia, you don’t need to submit them to the State Corporation Commission. Instead, you should keep them on record at your business so that you can consult them when you need to.
Do bylaws need to be signed?
No, bylaws aren’t required to have signatures. However, it’s not a bad idea to have your officers and directors sign your bylaws, to confirm that they agree to your policies.
How do I amend my bylaws in Virginia?
Virginia corporations typically create their own process for amending bylaws, either in the articles of incorporation or the bylaws themselves. VA Code § 13.1-714 states that shareholders have the power to amend bylaws. Directors may also amend bylaws, unless the articles of incorporation, the bylaws, or a Virginia law states that only shareholders may amend a particular bylaw.
Your bylaws can also increase the quorum (the number of voters who must be present to hold an official vote) or the number of votes needed to amend a bylaw.