Colorado corporate bylaws establish the framework for how the corporation will be governed. They include protocols for conducting meetings, electing directors and officers, issuing shares, and making essential business decisions. Typically drafted after the filing of the articles of incorporation with the Colorado Secretary of State, these guidelines are essential for the effective management and operation of corporations.
While they are not required to be filed with any governmental body, they are a necessary component of the incorporation process in the state, being legally binding on all shareholders and directors.
Legal Requirements
According to state law, bylaws are not mandatory but may be adopted during the initial meeting if desired. [1] However, nonprofit corporations might need to create bylaws to obtain tax-exempt status from the IRS. Here are some legal requirements to consider when drafting the bylaws for your corporation:
- Annual Meetings – Must occur at a specified time in the articles, bylaws, or set by the board, as long as it aligns with these governing documents. Failure to hold annual meetings does not affect the validity of any corporate actions. [2]
- Corporate Bylaws – May include any provisions for managing and regulating the corporation that comply with the law and the articles of incorporation. [3]
- Issuance of Stock – Shares of stock may be issued for any consideration which benefits the company. Shares issued for authorized consideration are fully paid and nonassessable. Shares with par value can be issued below that value unless otherwise stated in the articles or bylaws. [4]
Naming Considerations
- Required Words: “Corporation,” “Incorporated,” “Company,” “Limited,” or an abbreviation thereof (choose one).
- Prohibited Words: Any term violating any statute of the state.
- Name Reservation Period: 120 days.
- Renewal Period: Renewable (for successive 120-day periods).
- Transferability: Yes.
Emergency Bylaws
The board of directors can establish emergency bylaws establishing procedures for managing the corporation during emergencies. An emergency is declared if a quorum of directors cannot be obtained due to a catastrophic event. The emergency bylaws remain in effect only during the emergency event and are no longer effective once the emergency ends. [5]
