If you are thinking about starting a business, then you have a lot on your plate. You may find yourself pondering how you will raise capital, who you will hire to help you provide your goods or services and how you will protect your brand. Yet, from the get-go, the entity form you choose can play an important role not only in the initial stages of business formation but also in your business’s philosophical ideals moving forward.
Should you choose to create a corporation, then you will need to create bylaws. This document is separate from the articles of incorporation and details how the business will operate, including describing certain processes. The duties of the board of directors, as well as officers, can be spelled out, and so can record keeping practices, what qualifies as a conflict of interest and how the bylaws can be amended. These bylaws should be given significant consideration before being approved, as they can truly shape the way your business operates well into the future.
So what is at risk if you write incomplete or vague bylaws? First, since these documents can be released to investors, it may leave you struggling to raise much needed capital. Similarly, creditors may request to see your bylaws, meaning that they can have an effect on your ability to obtain loans. Second, important aspects of the business may be negatively affected, leaving you at a disadvantage moving forward. For example, failing to detail the duties of an officer may leave you with an incompetent corporate leader who is difficult to get rid of and replace.
The process of creating a business contains some of the most important decisions you will make as a business owner. That is why you need to make sure you are proceeding as a fully informed entrepreneur who can make competent decisions that furthers his or her best interests. Many Pennsylvanians find the assistance of a business law attorney to be critical throughout this process. This can help ensure a business gets off on the right foot.