A Startup Founder's Guide to Bylaws

Many startup founders and executives I work with are surprised to learn just how important bylaws are. 

Bylaws establish the internal rules that govern how your company operates, and they can have a significant impact on your startup's success. They're the rulebook for how your startup will operate. 

This article demystifies bylaws, providing practical guidance for their creation and use.

What are bylaws?

Think of bylaws as your startup's internal operating manual.

They outline the governing processes and procedures for your company.

While Delaware law (the Delaware General Corporation Law, or DGCL) sets certain default rules, bylaws let you customize how your startup functions.

What do bylaws cover?

Bylaws typically address areas such as:

What bylaws don't do

Bylaws cannot override Delaware law or your Certificate of Incorporation. 

If there's a conflict, the state law or your founding document takes precedence over the bylaws every time.

Why are bylaws important?

Optional bylaw provisions to consider

Some additional clauses you might consider for enhanced control:

Imagine a scenario where a co-founder wants to sell their shares to a competitor. 

A right of first refusal in the bylaws would allow you and other existing shareholders to purchase those shares first, maintaining control and protecting your business interests.

Remember, investors may request revisions to these types of provisions when funding your startup. 

Practical tips for bylaws


Bylaws are a powerful tool for ensuring the smooth operation of your startup. 

By understanding their purpose, content, and practical uses, you position your company for success and streamline its governance processes.