There are different types of business structures that entrepreneurs can form for the business they establish. Each business structure functions in a different way in terms of what a business is able to do, the responsibilities it has, and how it will be taxed. Sole proprietorships, partnerships, corporations, and limited liability companies are the different types of legal business structures to choose from. While a business may start as one businesses structure, over time as it matures and grows, the business structure may change.
When it comes to the formation of corporations, there will be a board of directors whose function is to determine policies and implement them, manage executive staff, and find resolutions to problems that may arise which could put the company in jeopardy. When a corporation is first formed, it is the responsibility of the board to write the company’s bylaws. Bylaws are the company’s rules. When drafting bylaws it can be advantageous to do so with the assistance of a legal professional. In California, the Los Angeles business attorneys at Leiva Law can help corporations write their bylaws.
Why are Bylaws Important?
Businesses need a plan that will guide their operations. Bylaws allow for a company to operate efficiently and effectively and within the scope of the law. Bylaws may include:
- The company’s name, location, and place of business.
- Whether the company is public or private.
- The company’s fiscal year for tax purposes.
- Stocks that the organization can use.
- Shareholder meeting information.
- How annual meetings will function.
- How members will be informed of proceedings.
- The names of the board members.
- The duties of the board.
- Procedures for selecting board members and the length of time that they can serve on the board.
- The process for replacing board members.
- Recordkeeping.
- Amendment procedures.
The bylaws are incredibly important to provide the board with guidance and rules for how the corporation will be run.
A corporation will file its articles of incorporation in the state where it operates. For non-profits, the bylaws must be included in the articles of incorporation filing. But for-profit businesses are not under this same obligation when they file. Though, should an audit on a corporation be done, the bylaws will be necessary to have on hand.
Having legal counsel on your side when you are starting a business can be helpful to ensure that sound legal decisions can be made and that all the details are accounted for. Corporate law can be incredibly complex, which is why working with an attorney is essential. Entrepreneurs in California can trust the legal guidance of the Los Angeles business startup attorneys at Leiva Law.
Speak with a Corporate Business Attorney in California Today
Leiva Law has provided business owners in California with effective and strategic legal counsel for more than two decades. If you have questions about the business formation process or if your business needs representation, the legal team at Leiva Law Firm is here for you. To schedule a free consultation with the Los Angeles business litigation attorney at Leiva Law, please call (818) 519-4465 today.
