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 initial bylaws are adopted by the board of directors at the organization meeting required under § 21.059, held after the certificate of formation takes effect.
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; and (post-SB 29) forum-selection and jury-waiver provisions.
Amendment authority
Under § 21.058, unless the certificate of formation provides otherwise, both the shareholders and the board of directors may amend the bylaws. This dual-authority default is one of the most important provisions for closely-held corporations to consider modifying, the certificate may reserve bylaws-amendment authority to one body or impose supermajority requirements.
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
As amended by SB 29 effective May 14, 2025, Tex. Bus. Orgs. Code § 2.115 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. These additions make the bylaws substantially more strategic than they were before May 2025.
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. Most material amendments can be effected through the bylaws without amending the public certificate. Corporations contemplating opting into SB 29 protections typically amend both the certificate and the bylaws for defense-in-depth.
Companion article: Starting a Business in Texas