Colorado Corporate
By-Laws
Key Benefits of Corporate By-Laws
Colorado corporate by-laws define the rules and procedures you will use to manage the operation of your corporation. They help you stay in compliance with state laws, and reduce the likelihood of misunderstandings or conflicts among directors, officers, and your shareholders.
Well-drafted by-laws provide your entity with legal protection, operational efficiency, and stability. All things every corporation needs for a strong, lasting presence in the business world.
Free Colorado Corporate By-Laws Template
Our attorney-drafted by-laws template can get your new Colorado corporation operating at peak efficiency fast! When you’re finished customizing the template with your corporation’s information, you can download it or print it out for free. No strings attached!
Don’t have time to finish it now? You can save your work and return to it later. You can also choose to hire us at any time to handle all your Colorado corporate formation, operations, and state compliance paperwork.
Every client who hires us as their registered agent, or for formation of their Colorado corporation, receives a free customized set of by-laws, access to an entire library of free business filings, and the widest variety of other business support services this side of the Rocky Mountains.
Why Does My Corporation Need By-Laws?
Although the State of Colorado does not require corporations to adopt a set of by-laws, they are an essential part of every successful corporation. By-laws become your blueprint for daily operations and a shield to defend you against lawsuits. Here are some other benefits by-laws provide for your corporation:
Legal Compliance
It’s true, Colorado does not require corporations to adopt by-laws. However, by-laws help every corporation stay in compliance with the specific rules related to corporate governance in the Colorado Business Corporation Act (CBCA). For example, rules pertaining to share classes, shareholder rights, and how profits or distributions are assigned are outlined in this state law.
Without your own set of by-laws to resolve internal disputes, your and your business would be subject to the rules laid out by the state.
Corporate Structure & Dispute Resolution
Defining the roles and responsibilities of everyone involved in the corporation creates a strong structure to build your business. Without by-laws, confusion and misunderstandings about decision making authority can lead to legal issues.
If conflict arises within the ranks, it’s the by-laws that establish the path to resolution. They describe processes for mediation, arbitration, and how changes in leadership can be made.
Creating Legitimacy & Investor Confidence
By-laws are crucial for creating corporation that runs smoothly, responsibly, and in accordance with state laws. Having well-crafted by-laws reduces the concern every new investor or stakeholder has about mismanagement or financial instability within your entity.
How to Write Colorado Corporate By-Laws: The Basics
If the idea of writing your by-laws yourself, or paying a lawyer, seems intimidating or too expensive, consider hiring us to form your corporation. We provide all our corporate clients with a free, customizable attorney-drafted set of by-laws.
Whether you write the by-laws yourself, pay a lawyer to write them, or use our free template, all corporate by-laws should include these basic articles.
Article I: Company Formation
This introductory article will state the official legal name of your corporation (the way it appears on state record). Next, declare your business purpose. This can be as general as “any lawful business activities” or it can be specific to your business industry (ex: buying real estate for vacation rentals). Also included here is the name and office address of your Colorado registered agent.
Article II: Board of Directors
Here you’ll define the powers and duties of the directors, as well as how many directors and any eligibility requirements. Other details like term of office, meetings, voting procedures, filling vacancies, and resignation or removal procedures are also outlined here.
Article III: Stock
This article describes who has the authority to issue stock, the class(es) of stock certificates your corporation will have, restrictions on stock issuance, and what happens if any stock certificates are damaged or lost.
Article IV: Shareholder’s Meetings
Location, time, and topics for discussion for shareholder’s meetings are outlined here. Also found here are details about shareholder rights and quorum (minimum number of attendees required at each meeting), proxies, and liabilities.
Article V: Officers
Definitions, responsibilities, and rights of all officer positions: President, Vice President, Secretary and Assistant Secretaries, and Treasurer. Also, the process for delegating these responsibilities if any officer is absent or otherwise unable to perform their duties. Other topics covered here are bonds, salaries, and indemnification policies.
Article VI: Capital & Finance
This section covers dividends, reserves, & depositories. Basically, how will the corporation spend money, save money, or transfer money for any reason.
Article VII: Books & records
This section gives information on how your corporate records (meeting minutes, stock ledgers, by-laws) will be stored, maintained, and accessed.
Article VIII: Notices
This section defines the process for notifying shareholders or directors of changes or decisions made by the board or officers.
Article IX: Special Corporate Acts
This is where you can define who has the authority to acquire, sell, or otherwise transfer the corporation’s assets. Who has the authority to sign checks? Do shareholders need to approve any asset sales or acquisitions, or structural changes to the corporation? What is the process for dissolving the corporation following shareholder approval?
Article X: Amendments
This is where you’ll decide the process for making changes and updates to these by-laws, and who has the right to do that.
The last order of business is to have the director(s) sign and date the by-laws to make them an active legally binding document.
The free by-laws our service offers includes a Corporate Resolution to Open a Bank Account page, and a printable stock certificate template you can use to issue stock to all your shareholders.
How Do I Make Changes to My Corporate By-Laws?
As your corporation grows and changes, it’s important to update or adjust your by-laws accordingly. For this reason, it’s a good idea to include the rules and a process for making amendments in your initial document.
According to the Colorado Business Corporation Act § 7-201 to 203, the board of directors is responsible for amending the by-laws, unless the Articles of Incorporation or specific by-laws in the original document give this power to the shareholders. You can also define who has the right to vote on amendments and what kind of majority vote is needed for an amendment to pass.
However you decide to proceed with by-law amendments, record these changes with a standard amendment form and add it to the original document. This way, you can produce a chronological history of changes to your by-laws when needed.
Just as your by-laws do not need to be filed with the state, any amendments made are also kept as private internal business documents.
FAQ
Still have questions? Check out our FAQ section below, or give us a call and speak to one of our local business experts.
Can I write my own corporate by-laws?
Yes! You can write your own corporate by-laws, but we don’t recommend it. Unless you are well versed and trained in the art of “lawyer speak,” it’s likely some important issues won’t be addressed (or the legal phrasing might leave large loopholes).
Why stress about writing your own by-laws when you can push the “easy button” and use our free template! Our lawyers did the work, we paid their fee, you get it for free.
Do I have to provide my full name and address in my by-laws?
Yes. All directors must list their full name and business address on the corporate by-laws. However, since this document is not filed publicly (like the Articles of Incorporation are with the state), your personal information won’t be compromised.
Are corporate by-laws legally binding?
Yes. When corporate by-laws are signed and dated by the appropriate parties (usually directors and/or officers over the age of 18), all have entered into a legally binding agreement to follow those laws for running the corporation.
Do my corporate by-laws need to be signed and notarized?
No, your corporate by-laws do not need to be notarized, but they do need to be signed by the directors. Signing the by-laws declares your ownership of the corporation and how you’re involved in its management.
Are corporate by-laws on public record?
No, your corporate by-laws available on public record. They are what’s referred to as an “internal business document.” This means public institutions, like the state, do not get to see your by-laws when you form your corporation. It should only be available to those directly involved with your business (and always at your disgression).
Where should I keep my by-laws?
You should keep your by-laws and all amendments made somewhere safe, but still readily accessible. For example, you can keep them in a safety deposit box, fireproof safe, or keep them online in an encrypted and password protected account (as we provide for all our clients).
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