Illinois Corporate Bylaws
Your bylaws are your corporation’s most important internal document, and all corporations in Illinois are required to have them. Corporate bylaws are also legally binding, so it’s important that you take care and consult a lawyer when creating this document for your corporation.
You can use our free, attorney-drafted Illinois bylaws template below to create your own corporate bylaws. Or, hire us to form your corporation, and you’ll get your own Illinois corporate bylaws, plus access to our entire legal forms library, which includes stock certificates, initial resolutions, and hundreds of free state and legal forms.
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Free Illinois Corporate Bylaws Template
Use our free template to create custom bylaws for your Illinois corporation. Simply enter your company information, save, and download your bylaws. Need more time? Just save your progress and come back later. You’ll also have the option to hire us to incorporate your business for you.
What Are Corporate Bylaws?
Corporate bylaws are a foundational governing document for corporations. Bylaws lay out the policies and procedures a company will follow and establish the powers and responsibilities of shareholders, directors, and officers. They also cover how stock will be issued, when and where annual meetings will be held, and even how your corporation will act in an emergency.
Most corporations consult a lawyer before finalizing their bylaws, to make sure the document is sound and will hold up in court.
Does Illinois require bylaws for corporations?
Bylaws are legally required for corporations in Illinois. According to Illinois Statute 805 ILCS 5/2.20, corporate bylaws must be adopted either by the shareholders or the initial directors.
Why Your Corporate Bylaws Matter
You might think that having corporate bylaws is just a formality, and that no one will actually see or care about what’s in your bylaws. But that just isn’t true. Here’s why having (and following) strong corporate bylaws is important.
1. Bylaws establish how decisions are made in your corporation.
Your bylaws establish who has power in your corporation, how voting works, and even the circumstances in which the company will dissolve. Making sure everyone in your corporation understands and agrees to your bylaws can help you avoid conflict and confusion down the road.
2. Your bylaws show outsiders that your corporation is legitimate.
Having legally sound bylaws shows that your corporation is professional and can be trusted. Investors, banks, and vendors may want to review your bylaws before doing business with you.
3. Your bylaws can be used in court.
If your company is ever sued, the court will look at your bylaws to make sure your company has been following standard procedures. Corporations that don’t follow their bylaws can face serious legal penalties.
What to Include in Your Corporate Bylaws
Illinois law gives corporations a lot of freedom for what they can include in their bylaws. Bylaws can include any rules for managing the company that the corporation wants, as long as the rules don’t contradict the law or the Articles of Incorporation (805 ILCS 5/2.25).
Here are some topics all corporate bylaws should include:
- Shareholder and director meetings
- Classes of stock that will be issued
- Number of directors and officers
- Record-keeping procedures
- How articles or bylaws can be amended
- Emergency procedures
Who writes the bylaws of a company in Illinois?
In Illinois, either the shareholders or initial directors of the company may adopt the bylaws, unless the Articles of Incorporation state that only shareholders have the power to adopt bylaws (805 ILCS 5/2.20).
Bylaws are usually created with the help of an attorney. A solid corporate bylaws template can serve as a good starting point.
Illinois Bylaws FAQ
An S-corp is a tax status, not a type of business entity, so whether you need corporate bylaws will depend on whether your business is an LLC or a corporation. A corporation with S-corp status is required to have corporate bylaws. However, an LLC with S-corp status needs a different type of governing document, called an LLC operating agreement. It’s a good idea to get help from an attorney when creating a governing document for an S-corp.
Corporate bylaws are not required to be notarized.
Bylaws are legally binding, and there can be serious legal consequences for directors, officers, or shareholders who violate the bylaws.
You’re not required to have a lawyer write your bylaws, but it’s a good idea to have a lawyer review your bylaws and make sure they’re legally sound.
Your bylaws don’t need to be approved by any government agency. Bylaws are internal documents that should be kept with your permanent business records.
Your bylaws should establish the rules for how they can be amended. In most cases, shareholders will need to vote to amend bylaws.