The bank says I need corporate governing documents? What do they mean? Understanding what bylaws and operating agreements and their purpose.

With the CARES Act and the new SBA and PPP loan applications in place, we have had clients reach out and ask for copies of their company bylaws or operating agreements.  Bylaws are used by corporations and operating agreements are used by limited liability corporations (LLCs), but what do they do?  And why do I need them?

Both serve as documents governing financial and functional decision making for a business entity.  These documents include rules that the business entity should and shouldn’t abide.  They both can include provisions as to ownership transfers, when annual meetings should be, and, in the context of the current COVID-19 disaster loans, who can make decisions for the company and who can sign on behalf of the company to bind it.  There are also versions for single held corporations and sole member limited liability corporations.  They are required to be approved by the owners of the company prior to being effective.

Should your business require new or revised bylaws or operating agreements, our office can help.  You can set up an initial consultation with one of our small business attorneys by emailing us at or calling us at (804) 423-1382.  We can help.