Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
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CHAPTER 29
BYLAWS
§ 29.01 Statutory Summary and Purpose of Bylaws
A Minnesota corporation is not required to adopt bylaws.1 However,
because bylaws “may contain any provision relating to the management
of the business or the regulation of the affairs of the corporation not
inconsistent with the law or the articles,”2 they are second only to the
articles in their importance.
Bylaws are the contractual private law of the corporation.3 They
govern both the corporation’s own actions and concerns and the
relationships among its shareholders, directors, and officers. They
provide procedural guidance to shareholders, directors, or officers. They
also make clear the substantive authority and limitations of each group.
Bylaws therefore are “expedient for the convenient functioning of the
corporation.”4
§ 29.02 Legal Effect—Separately
Corporate bylaws generally have the same legal effect as provisions
in the articles of incorporation.5 However, where a bylaw provision
conflicts with a statute or with the articles, it will be ineffective.6 Bylaws
are permanent and continuing in nature and remain in effect until legally
changed.7 If a particular provision is ambiguous, the practical
construction placed on it by the corporation and its constituents controls.8
A bylaw provision must be followed by all corporate constituents: the
corporation itself, shareholders, directors, and officers.9 Bylaws generally
do not have extracorporate effect against third persons without actual
notice of their content.10
Bylaws must be fair and reasonable, and consistent with laws and
public policy.11 A shareholder may raise the invalidity of a bylaw at the
time it is enforced, even though the shareholder did not object to the
bylaw at or after the time it was passed.12 However, if a bylaw is validly
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman