Texas Corporate Bylaws

The Texas corporate bylaws must be determined and then accepted by a corporation’s board of directors. Once in place, the board of directors (per the bylaws, shareholders, and articles of incorporation) can amend, repeal, or add provisions appropriate for the corporation’s current activities.

Last updated December 6th, 2024

The Texas corporate bylaws must be determined and then accepted by a corporation’s board of directors. Once in place, the board of directors (per the bylaws, shareholders, and articles of incorporation) can amend, repeal, or add provisions appropriate for the corporation’s current activities.

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Are they required in Texas?

Yes, Texas corporations must operate under a set of bylaws since this is a state requirement.[1]

Texas Corporate Laws

  • Corporate Tax: Texas does not impose a corporate tax, but does have a franchise tax on qualifying businesses.[2]
  • Board: Texas requires that a board of directors manages corporations but will allow the board to be known as any name that is appropriate for the “customs, usages, or tenets of the corporation.”[3]
    • Number – Corporations are obligated to have three directors on the board, while the bylaws can specifically fix a number; otherwise, it must be the same number of directors on the initial board of directors. [4]
    • Qualifications – Generally, “the certificate of formation or bylaws” dictate a director’s eligibility by stating director requirements (i.e. being a shareholder). [5]
    • Terms – Directors serve the full term that is documented in the bylaws or articles “unless the director resigns” or is formally removed.[6]
    • Staggered Terms – Corporations retain the option of dividing their directors by class for the purpose of staggering their elections; however, without bylaw oversight, the office terms “are not required to be uniform.”[7]
    • Fiduciary Duty – Directors must “direct the management” of the corporation’s business while remaining mindful of the corporation’s short-term and long-term interests.[8]
  • Officers: Corporations use bylaws and articles of incorporation to describe their offices and officers, while the state requires that at least a president and secretary be appointed.[9]
  • Meetings: The bylaws must define the notice given for meetings, while regular meetings “may be held with or without notice.”[10]
  • Quorum: The bylaws determine the quorum requirements to transact business; however, a director attending by proxy “may not be counted toward a quorum.”[11]
  • Emergency Bylaws: The board has the authority to “amend or repeal bylaws or adopt new bylaws,” such as during emergencies.[12]

Sources

  1. TX Bus Orgs § 21.057 (2023)
  2. 2023 Texas Statutes State Code Title 2, Sub. F, Ch. 171 Franchise Tax
  3. TX Bus Orgs § 22.201 (2023)
  4. TX Bus Orgs § 22.204 (2023)
  5. TX Bus Orgs § 21.402 (2023)
  6. TX Bus Orgs § 22.208 (2023)
  7. TX Bus Orgs § 22.209 (2023)
  8. TX Bus Orgs § 21.401 (2023)
  9. TX Bus Orgs § 22.231 (2023)
  10. TX Bus Orgs § 22.217 (2023)
  11. TX Bus Orgs § 22.213 (2023)
  12. TX Bus Orgs § 21.057 (2023)