The creation and enforcement of corporate bylaws are guided by statutory law, typically dictated by the state of incorporation, and common law principles that uphold the fiduciary duties of directors. Bylaws must align with both the corporation’s certificate of incorporation and overarching legal standards to be enforceable.
For example: A company incorporated in State X must adhere to State X’s corporate statutes when drafting its bylaws, including rules for shareholder meetings, board structure, and director elections. Bylaws that conflict with state law or common law duties, such as those imposing unreasonable restrictions on a board’s decision-making power, would not be enforceable.