Quick Guide to Nevada Corporation Bylaws
Creating corporate bylaws, or company bylaws, is one of the first and most important acts carried out by a corporation. Corporate bylaws define, outline, and organize the policies and structure of your corporation. Bylaws detail the company’s internal rules, and the roles and responsibilities of all the members. A couple examples include Board of Director voting requirements and location of annual shareholder or director meetings.
Corporation bylaws in Nevada are not submitted to the state or similar agency, and instead are kept with all the other corporate records at a primary or principal place of business. A majority of states require corporations to create and maintain bylaws. Although Nevada is one of the few states that doesn’t require corporations to adopt bylaws, it’s highly recommended to adopt and customize bylaws for the success of your company. When you hire us to form your Nevada corporation, we’ll include a free corporation bylaws template.
Our Nevada Corporate Bylaws Template at no Extra Charge
When you hire us at Nevada Registered Agent LLC to form your corporation, we’ll not only send you our corporation bylaws template at no extra charge, but we’ll also include templates for initial resolutions, stock certificates, and a resolution to open a business bank account.
While our bylaws template was written by a licensed attorney, it doesn’t constitute legal advice. Our bylaws template is meant to be a jumping-off point as you tailor the document to fit your Nevada corporation’s unique needs. We recommend working with a licensed professional during the customizing of your Nevada corporation bylaws.
Standard Articles For Your Nevada Corporate Bylaws
How the company conducts its affairs is founded in the company’s bylaws, providing comprehensive guidelines for the day-to-day and overall company operation. Below are highlights of the most standard articles for basic corporate bylaws with simple definitions and examples in non-legal jargon for your Nevada corporation.
Our free bylaws template we provide our clients will create a strong foundation for your company, and will have the details you need, while this page guides you through the main focal points of each article.
Article 1: Offices
Article 2: Shareholders’ Meetings
Article 3: Stock
Article 4: Board of Directors
Article 5: Officers
Article 6: Dividends and Finance
Article 7: Notices
Article 8: Seal
Article 9: Books and Records
Article 10: Special Corporate Acts
Article 11: Amendments
Article 1: Offices
1.1 Registered Office and Registered Agent
Officially state here that your corporation’s registered office is located in Nevada. This section will also verify the registered office location stated in the Articles of Incorporation, or wherever the Board of Directors (or simply, the Board) has agreed on.
1.2 Other Offices
The Board can elect to have more offices, as well. These additional offices can be in or out of Nevada.
Article 2: Shareholders’ Meetings
2.1 Meeting Place
It’s common to have the shareholder meetings at the corporation’s principal office, although the Board can choose to host the meeting in another location, if needed.
2.2 Annual Meeting Time
Here you’ll fill in the exact date and time the annual shareholder meeting will take place every year. Don’t worry if the date may eventually fall on a holiday—the next day will be the new predetermined meeting day at the same hour.
2.3 Annual Meeting – Order of Business
The annual meeting may follow a scheduled “order of business,” which is usually the following:
(a) Calling the meeting to order (starting the meeting).
(b) Showing proof of notice of the meeting.
(c) Reading of meeting minutes of the last annual meeting.
(d) Officer reports. Officers commonly include the president, vice president, secretary, and treasurer, and their duties are spelled out later in these bylaws. Officers that have reports will present in a pre-selected order determined by the Board. These reports will either contain information only about the corporation or have a recommendation for action, depending on the officer’s job duties.
(e) Committee reports. Common committees chosen in a corporation can include an audit, compensation, or nominating committee, and their duties are spelled out later in these bylaws. Committees that have reports will present in a pre-selected order determined by the Board. These reports will either contain information only about the corporation or have a recommendation for action, depending on their committee duties.
(f) Election of the directors.
(g) Other miscellaneous business items.
2.4 Special Meetings
Special meetings are meetings that are out of the ordinary, typically due to a big or unique administrative decision outside of the day-to-day decisions that need to be made. The Board, President, or voting shareholders equaling at least 1/10th of the corporation’s shares may call a special meeting, although you can customize these conditions to your liking. A member can file a “Meeting Waiver of Notice” if they’re unable to attend the meeting, however.
For example, if shareholders aren’t okay with the direction the company is going and would like to switch out directors as soon as possible, a special meeting can be called for this purpose.
2.5 Notice
Shareholders must be given a written notice, either delivered by mail or in-person, at least ten days before the shareholders’ meeting, but not more than fifty days prior to the meeting. This written notice also needs to include the purpose of the meeting.
2.6 Voting Record
An alphabetical list with all of the shareholders that are entitled to vote, along with their voting records, addresses, and number of shares needs to be generated at least ten days before the shareholder meetings.
Remember to keep this generated document available on file at the principal office for that ten day period and at the shareholder meeting for potential inspection.
2.7 Quorum
A quorum is the minimum number of corporation members that need to be present at the annual meetings. Without the minimum number of members met, the meeting won’t be valid and business can’t be transacted. Below are a couple of quorum formalities:
Subsection (a): The quorum at meetings must consist of voting shareholders who represent a majority of the company’s shares.
Subsection (b): The quorum members at meetings must be present either physically or by proxy.
2.8 Closing of Transfer Books and Fixing Record Date
Two steps can be taken when you’re going to figure out which of your shareholders should get either a notice of or a vote at a meeting, or receive payment of any dividend:
- Close the stock transfer books (which keep record of all the stock transactions, like stock issued, stock sold, etc.)
- Fix a specific date to determine which shareholders should be included
Both of these things must be at least 10 days and not more than 50 days before the meeting, according to Nevada state law.
2.9 Proxies
Shareholders can vote in person or by proxy if the shareholder isn’t able to physically attend the meeting. Voting by proxy just requires the shareholder (or their attorney-in-fact) to sign their vote in writing.
2.10 Action by Shareholders Without a Meeting
If having an annual meeting is just not an option, then there’s a potential alternative: consent to the actionables in writing. Any action you would have taken at any annual meeting can still be taken if all the voting shareholders consent to the action in writing.
2.11 Waiver of Notice
If preferred, most shareholders can sign a written waiver of the required notice before or after the meeting time.
Article 3: Stock
3.1 Certificates
Certificates are the tangible documents held by shareholders that represent their amount of company ownership. The certificates typically list the exact amount or percentage of shares owned, the shareholder name, the date, official signatures, and the corporate seal. You can choose to have the certificates include more information, such as par value of the stock or an official printed corporate statement.
This article begins with our recommended 4 basic pieces of information for the stock certificates:
- Stock certificate issuance will be in numerical order (from the stock certificate book).
- They will be signed by the President or Vice President and the Secretary or Assistant Secretary.
- They may have the official (or exact copy of the) corporate seal.
- Even if the officer who signed the certificate discontinues their corporation membership, the corporation itself can re-issue the certificate and maintain the certificate’s validity.
3.2 Transfer
When it comes to transferring stock, there’s more to do more than just issue a new certificate and surrender and cancel the old one . Legally, you’ll need to record entries of all transfers in the corporation’s stock transfer books or ledgers to reflect the changes.
Remember to keep these transfer records at your company’s registered or principal office, or the office of the transfer agent, if your company chooses that route.
3.3 Registered Owner
This section states that registered shareholders are treated as the “holders in fact of the stock.” This essentially means the shareholder holds their stock directly with the company, and receives things like communications and dividends directly from the company. It also states that a specific resolution can be adopted so that a shareholder can have some or all of their shares held for the account of another person or persons, if desired.
3.4 Mutilated, Lost, or Destroyed Certificates
When the inevitable happens, and a shareholder loses or destroys their stock certificate, this clause will allow another to be issued in its place—so long as the shareholder can prove their certificate was lost or destroyed. The Board can require some kind of indemnity (like a reimbursement or compensation) to be a condition for issuing certificates as well.
3.5 Fractional Shares or Scrip
Fractional shares or scrips are segments of a single share. This section states that even if a member has only a fractional share or scrip, that member is considered a qualified shareholder, with the additional details listed later in this section
3.6 Shares of Another Corporation
When one of the shareholders is another corporation, this article explains further how the voting may be done by a designated officer of that other corporation, chosen by the Board.
When you hire Nevada Registered Agent LLC to form your corporation, we’ll provide you our bylaws template with the full, nitty-gritty details of each and every standard bylaw.
Article 4: Board of Directors
4.1 Numbers and Powers
The foundational guidelines of the Board of Directors starts here. This article states that the Board members are elected for a term of one year, aren’t required to be shareholders or residents of Nevada, and clarifies that the Board exercises the powers and acts of the corporation that the shareholders, Articles of Incorporation, or bylaws aren’t already required or directed to exercise.
4.2 Change of Number
You can amend these bylaws at any time to increase or decrease the number of directors. Remember that too many directors can slow down meetings, and therefore, slow down progress, although it’s important to have enough directors to run the company successfully.
4.3 Vacancies
When filling an unexpected vacancy or vacancy due to a voted increase of the number of directors, our template recommends the rest of the Board to require a majority affirmative (in-favor) vote, and the filled vacancy to last for the remaining duration of the term, just until the next election.
4.4 Removal of Directors
Whether it’s removing one director or the entire Board, a majority shareholder vote can make that happen. Sometimes these actions are necessary if there’s a continuing conflict of interest, ineffectual leadership, or violation of ethics.
4.5 Regular Meetings
The annual and other regular Board or committee meetings can be held just about anywhere that the Board or committee approves, although the principal place of business is normally expected. The annual meeting of the Board of Directors, however, is typically held immediately following the annual shareholders meeting.
4.6 Special Meetings
Special Board meetings don’t have many restrictions—they can be held at any place and at any time. As long as it’s the Board’s Chairman, any officer, or two or more directors calling the special meeting, one can be called at any time, although this rule can be customized to fit your company’s needs.
4.7 Notice of Meetings
Both the annual and other regular Board or committee meetings can be held with or without notice. Special Board meetings legally require at least a 2-day notice. More details, including how notice can be given, is addressed later in this section.
4.8 Quorum
As we discussed in Article 2.7, a quorum is needed at all these meetings. It can be tough to gather the quorum needed at meetings, so it’s important to remember signing a proxy can be a huge help, since it can count towards the quorum.
4.9 Waiver of Notice
A director can send out a waiver of notice for meetings. Circumstances can make it difficult to ensure all the attending members to a certain meeting receive a formal meeting notice in the appropriate amount of time beforehand, and the Board can choose to send out a waiver of notice instead.
4.10 Registering Dissent
When a director dissents on an action, or disagrees with the majority vote, and wants to take further action, that director can register their dissent into that meeting’s minutes. It’s important for all the members to know they can take action if they feel it’s for the best interest of the company.
4.11 Executive and Other Committees
A few examples of special committees includes an audit, compensation, or nominating committee. When a special committee is appointed, usually made possible by a resolution passed by the Board, that committee will have most the same authority of the Board, minus amending the Articles of Incorporation and bylaws or making major changes to the corporation’s property or assets, and be held to the same standard, such as recording special committee meeting minutes.
Special committees are advantageous for a number of reasons. You’ll have the certainty that there won’t be an issue if directors have a preexisting interest or bias on a special committee decision, or when directors have a conflict of interest on a matter that can be solved by a special committee instead.
4.12 Remuneration
The term remuneration here refers to compensation or some form of payment in exchange for services or employment. This article explains that directors aren’t paid a stated salary or special remuneration. A resolution can be voted on and put in place by the Board to provide directors (or special committee members) a fixed sum or other payment, however.
4.13 Loans
The shareholders can vote to make loans to the directors if desired. These loans can be a great financing option, but it’s important to speak to a tax professional to learn more about the implications for your company.
4.14 Action by Directors
An alternative method to taking action within the corporation besides a meeting is to have all the members sign a written consent. Doing so will have the same effect as a unanimous vote in a meeting.
4.15 Action of Directors by Communications Equipment
Similar to written consent, a conference phone call can also work in place of an in-person meeting in order to take action within the corporation.
Article 5: Officers
5.1 Designations
This article starts off with a general explanation of the officer designations made by the Board, which can include the following:
- President
- Vice President(s)
- Secretary
- Assistant Secretary
- Treasurer
- Assistant Treasurer
With the exception of the offices of President and Secretary, the same person can hold more than one officer position. These positions generally last a year and are elected by the directors at their first meeting, which will follow the first annual shareholders’ meeting.
5.2 The President
The President is in the position of authority over all the shareholder and director meetings, with a general supervision of all the company’s affairs.
More specifically, this means the President typically makes the decisions on the company’s policies and overall operations. The President’s duties can be tailored or customized in this section, however.
5.3 Vice President
The Vice President takes over all the functions of the President when the President is absent. If there are multiple Vice Presidents, the Board can put them in a designated order, and assign each of them different powers or duties.
5.4 Secretary and Assistant Secretaries
The Secretary has a laundry list of specific duties assigned to them by the Board you’ll find detailed in our bylaws template we provide to our clients.
It’s important to remember these duties can and should be detailed finely to fit the company’s needs.
5.5 The Treasurer
Much like the Secretary, the Treasurer also has a long, unique list of duties on top of the general maintaining of finances that must be customized to fit the company’s needs.
5.6 Delegation
When any of the officers are absent for any period of time, and their duties need to be maintained or completed, the Board can delegate that task to just about anyone else they see fit.
5.7 Vacancies
Vacancies here are defined as any office that becomes unoccupied and must be filled by the Board through a regular or special meeting vote.
5.8 Other Officers
The Board can appoint other officer positions if needed. The list of additional possible officer positions is long—a few common positions include a Chief of Technology Officer, Chief Marketing Officer, or Chief Design Officer.
5.9 Loans
A loan to any of the officers from the company is possible, and our template dictates that it will require a two-thirds shareholder vote in favor for that decree, which is a customizable rule.
As mentioned earlier, loans can be a helpful and smart financing option if it’s right for your company.
5.10 Term – Removal
Outside of the expected year an officer is in their position until a successor is elected at the next meeting, an officer can be removed without cause with a majority in-favor vote by the shareholders. Take a careful analysis of all the legal rights in this type of situation and seek professional guidance to avoid unnecessary turmoil for the company.
5.11 Bonds
The Board can pass a resolution to have the officers give bonds to the corporation, on the condition of a faithful job performance.
These bonds protect the company from a financial loss if the officer is unfaithful to their job in a costly or illegal way.
5.12 Salaries
The officer salaries are fixed and remain unaffected even if that officer is a director of the company, unless the Board agrees to offer remuneration.
Article 6: Dividends and Finance
6.1 Dividends
This article begins with the details of corporate dividends, such as the deposit and withdrawal process, where distributions are actually paid out of, and information on reserves.
Distributions paid out from the dividends can come from either the company’s surplus, the net earnings from the current fiscal year, or from treasury shares. Get in touch with a tax professional to learn the most beneficial method for your company and its members.
6.2 Reserves
Before any distribution from the company’s earned surplus is made, the Board can set aside any practical amount of that surplus they feel necessary for the benefit of the company.
6.3 Depositories
Company funds needs to be deposited in the company’s designated bank account. Withdrawing corporate funds can be done by check or other payment order, according to the rules or resolution determined by the Board.
Hire Nevada Registered Agent LLC to form your corporation and you’ll receive our bylaws template with all the specific details of each bylaw to help get your corporation started off on the right foot.
Article 7: Notices
Notices of any kind to any shareholders can be delivered either personally or by mail. Just make sure you send any postal mail to the members’ last known address in the records to make your notification method official.
Article 8: Seal
Although not legally required, your company can adopt an official corporate seal, which is a stamping or embossing tool for your company’s documents to show that it is approved or certified. The seal can have any form and inscription the Board chooses.
Article 9: Books and Records
This section explains that corporations must keeps books and records, such as meeting minutes or list of the shareholder information, either written or electronically. These records also must be physically kept at a principal or registered office (or transfer agent, if applicable).
It’s important to maintain these records, and failing to do so can have detrimental effects, such as breaking the corporation’s limited liability and putting the owner at risk.
Article 10: Special Corporate Acts
10.1 Execution of Written Instruments
The President is the officer to execute (sign something with the proper formalities in place) all the written instruments, such as the contracts, deeds, or other corporate documents.
10.2 Signing of Checks or Notes
The Board must designate an officer to sign checks or similar types of notes. This designated officer is often times the CEO or CFO (Chief Financial Officer).
10.3 Indemnification of Directors and Officers
Directors and officers of the corporation are indemnified, or protected from liability of actions as long as the directors or officers acted in good faith, and for the good of the company.
Article 11: Amendments
11.1 By Shareholders
The shareholders have the power to amend or repeal the bylaws by a majority in-favor vote at any regular or special meeting.
Amendments help keep the bylaws up-to-date as the company changes and grows, and makes sure the company can continue to effectively respond to new types of challenges and affairs.
To amend your Nevada bylaws, you’ll need to have a majority affirmative vote from the directors and voting shareholders, and then document and keep the amendments with the original bylaws.
11.2 By Directors
Much like the shareholders, the directors also have the power to amend or repeal the bylaws, although whatever action is taken here can also be amended or repealed by the shareholders.
11.3 Emergency Bylaws
Emergency bylaws can be adopted if necessary, such as during wartime or similar disaster.
Signatures
Adopt these bylaws into your corporation by having the directors sign and date at the bottom (section provided for this on our bylaws template).
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