Corporate bylaws are the internal rules a corporation adopts to govern how it operates, covering directors, officers, meetings, and decision-making procedures.
Where the articles of incorporation create the company and set its share structure, the bylaws set the operating rules: how directors and officers are appointed, how and when meetings are held, quorum and voting requirements, signing authority, and the corporation's banking and borrowing powers.
Bylaws are adopted by the directors and typically confirmed by shareholders, and they are kept in the minute book. Following them matters, decisions made without proper authority or process can be challenged, and lenders and buyers review the bylaws to confirm the company is properly governed.
A corporation's bylaws specify that any borrowing over $50,000 requires a board resolution. When the company seeks a larger loan, the directors pass the required resolution, and the lender reviews the bylaws to confirm the authority.
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