What Is Included in Illinois Corporate Bylaws?
Your bylaws could potentially include any rule that doesn’t violate Illinois law or your Articles of Incorporation. However, all strong corporate bylaws will cover at least these topics:
- Meetings
- Stock
- Directors and officers
- Finances
- Records
- Amendments and emergencies
What Information Do I Need to Use Northwest’s Free Illinois Corporate Bylaws?
Want to focus on your business and leave the heavy lifting to us? Our lawyers drafted a comprehensive corporate bylaws template you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free corporate bylaws template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your Illinois Articles of Incorporation.
List when (date and time) you will hold annual meetings for shareholders.
Once your board of directors have approved the bylaws for the corporation, fill in the date.
The director signs the bylaws to approve them on behalf of the board of directors.
Expect to also maintain up-to-date lists of all shareholders and directors.
Why Do Corporate Bylaws Matter in Illinois?
Bylaws are a legal and practical necessity for Illinois corporations. Here’s why.
1. Corporate bylaws are legally required in Illinois.
Illinois statute §805 ILCS 5/2.20 requires that bylaws be adopted either by shareholders at the first shareholder meeting or by directors at the initial director meeting.
2. Corporate bylaws establish the rules and roles within your corporation.
Your bylaws establish how your corporation will be organized and managed, including how many directors and officers you will have and who has decision-making power. They determine how voting will work, and where board and shareholder meetings will be held.
Also, your corporate bylaws will be your guidebook for resolving conflict, as they contain all of your corporation’s policies.
3. Corporate bylaws prove that your business is a legitimate corporation.
Bylaws are necessary for proving that your corporation is a lawful business. Banks will ask to see your corporate bylaws when you open a business bank account. Potential backers will want to look at your bylaws to make sure they’re investing in a trustworthy company.
Plus, if your corporation is ever taken to court, your bylaws can help you maintain your limited liability status. Your bylaws show that your corporation has procedures and rules that make it a separate legal entity from the people who manage it.
Who Prepares the Bylaws?
In Illinois, either the shareholders or the directors can prepare the corporate bylaws. Often, whoever prepares the bylaws will consult with an attorney, to make sure their bylaws pass legal muster. Northwest has a free, attorney-drafted Illinois corporate bylaws template that can get you started.
Are Corporate Bylaws Legally Binding?
Yes. Your bylaws are legal documents that can be used in court. Violating your corporate bylaws could have negative legal consequences, like losing your limited liability status.
FAQs
No. The operating agreement is a legal document that outlines the rules for how the owners of an LLC interact. Bylaws, on the other hand, establish the rules for running a corporation and managing its internal affairs.
No. You should keep your corporate bylaws on file with your company’s other internal documents, rather than filing it with the Illinois Secretary of State.
Technically, your corporate bylaws don’t need to include signatures to be legally valid. However, we recommend that your directors and officers sign your bylaws, to ensure that everyone agrees to the policies you’ve established.
For the most part, corporations establish the rules for amending bylaws in the bylaws themselves. For example, bylaws almost always define the quorum (the minimum number of directors or shareholders who must be present for a vote to take place).
According to Illinois statute §805 ILCS 5/2.20, either shareholders and directors may amend corporate bylaws, unless the Articles of Incorporation state that only shareholders may amend bylaws.