Of the many challenges faced when starting a business, creation of a company’s bylaws can be one of the more complex, technical, and overwhelming challenges of them all. While daunting, such agreements can protect startup companies from liability in business transactions. A Silicon Valley corporate lawyer can help your business create the bylaws which will best meet your legal needs.
Before crafting any corporate policy, it is important to determine your goals. Does the policy need to protect the company from legal liability? Reduce operating expenses? Provide clarity for executing important business discussions? Identifying clear goals will allow for bylaws to effectively address such needs. Owners should also be sure to consider both the short and long-term needs of the business. Business, financial, and legal concerns can change over time. Effective bylaws will allow the business to adapt to the dynamic reality of the marketplace.
- Identify the needs of your shareholders or stakeholders
While your first priority will often be the interests of your business, it is important that startup owners do not ignore the needs of their shareholders. Conflicts can arise between company owners and shareholders, and such conflict has even caused a mass exodus of the board of one high-profile food startup. According to the New York Times, Hampton Creek managers began an effort to amend corporate bylaws in June 2017. The effort – which would have given more control to investors – was unsuccessful, and four of the five board members resigned in July 2017. Only the founder remained on the Board of Directors.
This case illustrates the importance of balancing the interests of everyone involved in the company through a well-written set of Bylaws that will guide a company through its key business decisions. Even when it appears that there is a conflict, there is often a creative alternative solution that can be found in a well-crafted and clearly written set of bylaws.
- Craft policies which meet the needs of both sides
Designing a policy – and drafting such a policy for your formal written bylaws – is a complicated process which often requires the services of a skilled corporate attorney. This, is an investment that can avoid costly litigation and time-consuming disputes. Business owners who choose to draft corporate bylaws themselves may leave both their business and personal assets exposed to liability.
The Right Choice for Corporate Legal Advice
The experienced attorneys at Structure Law Group, LLP will help you build a profitable business from the ground up. Schedule a consultation today by calling (408) 441-7500, emailing firstname.lastname@example.org, or submitting a request through our online contact form.