Bylaws
Internal governance rules of a Texas corporation establishing how the corporation operates, board and shareholder meetings, officer duties, voting and quorum, indemnification, and other internal management matters.
Bylaws are the internal governance rules of a Texas corporation, the document that establishes how the corporation operates, including procedures for shareholder and board meetings, officer elections and duties, voting and quorum rules, indemnification, and other internal management matters. The bylaws supplement (but do not displace) the certificate of formation and the TBOC.
Adoption
Under § 21.057(a), the board of directors adopts the initial bylaws. The organization meeting under § 21.059, held after the certificate of formation takes effect, is called to adopt bylaws and elect officers. That section does not apply to a corporation created by a conversion or merger whose plan states the bylaws and names the officers.
Content
Under § 21.057(b), bylaws may contain any provisions for the regulation and management of the corporation's affairs that are consistent with applicable law and the certificate of formation. Typical Texas bylaws include: number of directors and qualifications; board meeting procedures; officer titles, election, and duties; shareholder meeting procedures; indemnification provisions; share issuance and transfer; fiscal year; forum-selection provisions under § 2.115; and, since SB 29, jury-waiver provisions under § 2.116.
Amendment authority
Under § 21.057(c), the board may amend or repeal the bylaws unless the certificate of formation or the code reserves that power to the shareholders, or the shareholders, in adopting a bylaw, provide that the board may not change it. Under § 21.058, the shareholders may amend, repeal, or adopt bylaws unless the certificate of formation or a bylaw adopted by the shareholders provides otherwise.
Bylaws vs. certificate of formation
The certificate of formation is the public document filed with the Secretary of State; bylaws are private. Where the two conflict on a matter that may be addressed in either, the certificate generally controls. Some matters must appear in the certificate (classes of stock, par value, exculpation under § 7.001); others may appear in either document.
Forum-selection and jury-waiver provisions
Tex. Bus. Orgs. Code § 2.115, added in 2021 and amended by SB 29 effective May 14, 2025, permits the certificate or bylaws to designate Texas courts (including the Business Court) as the exclusive forum for internal entity claims. New § 2.116 permits enforceable jury-waiver provisions in governing documents.
Indemnification provisions
Under § 8.003 (as amended September 1, 2021), restrictions on indemnification or advancement may be set out in any "governing document" of the entity, not solely the certificate. The bylaws may now address indemnification restrictions with the same effect as if they appeared in the certificate.
In Texas corporate practice, the bylaws are where day-to-day governance machinery lives, while the certificate establishes existence and the most fundamental structural choices. Many governance changes can be made through the bylaws, but matters the code assigns to the certificate, such as authorized shares, classes, and exculpation, require a certificate amendment. The election to be governed by § 21.419 may appear in any governing document. § 21.419(a)(2).
Companion article: Starting a Business in Texas