How to Amend a Corporation

By Heather Frances J.D.

Ideally, businesses should be set up so they don’t change very often since changing a business’s structure or other operating detail can be complicated and expensive. If your business is structured as a corporation, you may have to amend your governing documents -- articles of incorporation and bylaws -- to make changes to the corporation. However, the process to change portions of the corporation depends on the item to be changed, your state's laws and any amendment instructions in your governing documents.

Ideally, businesses should be set up so they don’t change very often since changing a business’s structure or other operating detail can be complicated and expensive. If your business is structured as a corporation, you may have to amend your governing documents -- articles of incorporation and bylaws -- to make changes to the corporation. However, the process to change portions of the corporation depends on the item to be changed, your state's laws and any amendment instructions in your governing documents.

Corporate Foundations

A corporation’s structure is based on its articles of incorporation, which lay out the basic foundations of the corporation, and the corporate bylaws, which describe how the corporation operates and makes its decisions. Officers of the corporation cannot singlehandedly change these documents. Once these two documents have been filed with the state or adopted by the corporation’s shareholders, they must be officially amended by the board of directors to be significantly changed. Frequently, one or both of these documents detail the process for amending certain aspects of the corporation and the corporation must follow that amendment process.

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Minor Amendments

State laws vary when it comes to how corporate documents must be recorded and amended. However, minor clerical amendments that do not change the corporation’s structure, such as an address change, typically require little more than filing a form. For example, Georgia permits corporations to change their addresses or officers by filing an annual registration form and paying a filing fee. California corporations can change the names and addresses of their designated agents by filing a special form.

Amending Articles of Incorporation

More complicated amendments may require that your corporation change its articles of incorporation by filing articles of amendment. Since your corporation filed these with your state’s business registrar when it began, you must file your amended articles with the same state office. Your state laws may specify how the changes must be approved, including requirements for approval by the board of directors or shareholders. Someone authorized to act on behalf of the corporation, such as a manager, must file the approved amendment with the state to make the change effective.

Amending Bylaws

It can be more complicated to change a corporation’s articles of incorporation than to change its bylaws. Thus, many corporations choose to specify their governing details in their bylaws as much as possible rather than putting them in the articles of incorporation. Since bylaws are typically an internal document, they can be changed through an internal process. Generally, corporate bylaws contain amendment provisions that describe how they can be amended. For example, bylaws may specify that certain things can be changed by a vote of the corporation’s board of directors while other things cannot be changed without shareholder approval. If the bylaws do not address amendment, your state’s laws may contain amendment instructions. If the bylaws permit amendment by the board of directors, the corporation might hold a board meeting and pass a resolution authorizing the amendment, which is then recorded in the meeting’s minutes. Alternatively, the corporation could prepare a document for each board member to sign indicating his consent.

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References

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