Are bylaws required in Delaware?
Yes, corporations must institute their bylaws during their initial board meeting. [1]
Delaware Corporate Laws
- Corporate Tax: Corporations in Delaware must pay an annual 8.7% tax. [2]
- Board of Directors: Delaware corporations operate under a board of directors unless the articles of incorporation specifically show an alternate delegation of the “powers and duties of the board.”[3]
- Number – The bylaws define the number of directors on the board and may call for “1 or more members, each of whom shall be a natural person;” however, if the articles fix a number on the board only an amendment to the articles may release this power to the bylaws.[4]
- Qualifications — Directors have no shareholder obligations unless the bylaws require this and “other qualifications” accordingly.[5]
- Terms — If there is only one class of director, then the “term of office” a term shall begin as well as terminate upon the annual meeting according to election results.[6]
- Staggered Terms – Corporations classify their directors into “1, 2, or 3 classes;” however, any directors in place at the time of this assignment must serve their full term.[7]
- Fiduciary Duty – Board members enjoy some protection when acting in good faith since they are “fully protected” when basing their actions on information that originates from their corporation. [8]
- Officers: The bylaws (or articles) appoint at least one officer responsible for maintaining board and stockholder meeting records “in a book to be kept for that purpose.”[9]
- Meetings: While Delaware does not explicitly require notice for regular meetings, any meeting allowing shareholder votes requires at least ten to sixty days’ notice that specifically lists the “place, if any, date and hour of the meeting.”[10]
- Quorum: Whenever a corporation has a separate series of stock, “no less than 1/3 of the shares of such class or series or classes or series” must be present for a quorum. [11]
- Emergency Bylaws: The board of directors can adopt emergency bylaws that define and provide liability protection to directors and officers from liability during a state of emergency “except for wilful misconduct.”[12]