What Is Included in Puerto Rico Corporate Bylaws?
Corporate bylaws cover basic policies and procedures for issues such as company finances and management. Bylaws should cover a range of topics, including:
- Directors and officers
- Stock
- Meetings
- Finances
- Record keeping
- Amendments and emergencies
What Information Do I Need to Use Northwest’s Free Puerto Rico 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 Puerto Rico 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 Puerto Rico?
Corporate bylaws help you to prepare for the myriad situations your corporation is likely to face, and to protect your corporation should it get sued or enter into bankruptcy. Unlike your Puerto Rico Certificate of Incorporation, your corporate bylaws do not have to be filed with Puerto Rico’s Department of State.
Even though bylaws don’t need to be filed with the state, that doesn’t mean you should skip them. Here are two reasons why your bylaws are worth taking the time to get right:
1. Corporate bylaws establish the rules and roles within your corporation.
Corporate bylaws help to establish clear rules for how your corporation will address issues like where you will hold board and shareholder meetings, record-keeping procedures, issuance of stock, and even how you will vote on amendments to the bylaws. Plus, if there is ever an internal dispute, your bylaws will be used to settle the disagreement.
2. Corporate bylaws prove that your business is a legitimate corporation.
Landlords, banks, and potential investors will want to see your bylaws before doing business with you. A corporation that hasn’t taken the time to create bylaws isn’t a company many people will trust. Plus, if your corporation ever gets sued, your bylaws will help bolster your claim to limited liability, which is crucial for protecting your personal assets.
Does Puerto Rico Require Corporate Bylaws?
No. P.R. Laws tit. 14, § 3508 notes that bylaws MAY be adopted by the incorporators, initial directors of a corporation, or by the board if no payment for shares has yet been received. The statutes, however, don’t specifically require the adoption of bylaws. We wouldn’t recommend skipping over creating bylaws though, because they not only provide structure for your corporation, but they can also help you maintain limited liability by showing that your corporation is a distinct legal entity with clear rules and protocols.
Who Prepares the Bylaws?
Corporate bylaws are adopted by directors or incorporators at your initial organization meeting. While it’s a good idea to consult with a lawyer before finalizing your bylaws, you can use our free Puerto Rico Corporate Bylaws template to help get you started.
Are Corporate Bylaws Legally Binding?
Yes. Your bylaws can be used in a court of law to reinforce your limited liability status by showing that your corporation adheres to standard protocols. On the flip side, if your corporation doesn’t adhere to its bylaws, your corporation could be hit with lawsuits, fines, and even dissolution.
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. Because your bylaws are internal, there is no need to file them with the government of Puerto Rico. However, you’ll want to keep your bylaws easily accessible with the rest of your business records.
Bylaws do not need to be signed, but the act of signing your bylaws demonstrates that everyone is on the same page about how your corporation will function, so it’s a good idea.
P.R. Laws tit. 14, § 3508 states that “the power to adopt, amend, or repeal the bylaws may be conferred upon the board of directors.” The law also states that shareholders have the power to amend and repeal bylaws, even if directors also have that power. In general, the procedures for amending bylaws are articulated in the bylaws themselves. Any amendments that are agreed upon won’t need to filed with the state.