The main difference between constitution and bylaws is that constitution is a legal document that contains the fundamental principles according to which an organization is acknowledged to be governed, while bylaws are rules an organization makes to control the actions of its members.

We can divide the rules of an organization into several categories as constitution, bylaws, rules of order, and standing orders. Moreover, the constitution and bylaws are documents that contain basic principles and rules by which an organization operates. 

Key Areas Covered

1. What is Constitution 
     – Definition, Features
2. What are Bylaws
     – Definition, Features
3. Difference Between Constitution and Bylaws
     – Comparison of Key Differences

Key Terms:

Bylaws, Constitution

What is a Constitution

The constitution of a company is a legal document that contains the basic principles along which the company can operate. It’s actually a corporate governance document that governs the management of a company and sets out the rights and duties of the people in the company. Most companies will draft a constitution when registering their business.

A constitution will typically include organization of company meetings, rights of shareholders and share classes, execution of company documents, appointment, powers and removal of directors as well as the process of amending the constitution. Moreover, a company constitution will be used in conjunction with a shareholders’ agreement to further clarify the rights of shareholders.

What are Bylaws

Bylaws of a company are the governing rules by which that company operates. When forming a company or corporation, the first act must be creating the bylaws, which is a single document that contains all the rules. They are the principles that guide the operations of the company. These also guide the board of directors in their work to manage the day-to-day operations of the corporation. Moreover, bylaws involve issues like the purpose of the organization, members, responsibilities of the board of directors, their election, terms of office, board and shareholder meetings, and how the board of directors functions.

It’s also important to know that corporate bylaws only regulate only the corporation in which they apply. Moreover, they can vary from organization to organization. Generally,  a corporation’s founders or directors under the authority of its Charter or Articles of Incorporation create corporate bylaws. Furthermore, the wording of the bylaws should be precise; if not, the meaning may be open to different interpretations.

The last section of the bylaws also describes the procedure for amendments. This section also describes who has the authority to change them, how much notice is required, and how many votes are required to change them.

Difference Between Constitution and Bylaws

Definition

Constitution is a legal document that contains the fundamental principles according to which an organization is acknowledged to be governed, while bylaws are rules an organization makes to control the actions of its members.

Content

A constitution will typically include organization of company meetings, rights of shareholders and share classes, execution of company documents, appointment, powers and removal of directors and process of amending the constitution. Bylaws, on the other hand, involve issues like the purpose of the organization, members, responsibilities of the board of directors, their election, terms of office, board and shareholder meetings, and how the board of directors functions.

Conclusion

The main difference between constitution and bylaws is that constitution is a legal document that contains the fundamental principles according to which an organization is governed, while bylaws are rules an organization makes to control the actions of its members.

Reference:

1. Murray, Jean. “What Are Bylaws?” The Balance Small Business, Available here.
2. “What Is a Company Constitution? How To Adopt a Company Constitution.” LegalVision, 21 Oct. 2020, Available here.

Image Courtesy:

1. “3196481” (CC0) via Pixabay

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