What are corporate by-laws and does my Ontario corporation need them?

Corporate by-laws are the internal rules that govern how your corporation operates day to day. They address things like how directors are elected and removed, how director and shareholder meetings are called and conducted, how votes are counted, who can sign contracts on behalf of the corporation, and how officers are appointed.

Under the Ontario Business Corporations Act, corporations must have by-laws. They are typically adopted at the first organizational meeting shortly after incorporation, by resolution of the initial director and then confirmed by the shareholders. Many Ontario law firms use a standard form general by-law (often called "By-Law No. 1") as a starting point.

By-laws are not filed with the Ontario government — they are internal documents kept in your minute book. They can be amended or repealed by shareholder resolution, and amendments must also be recorded in your minute book.

For a single-person corporation, by-laws are a formality but still a required one. For corporations with multiple shareholders, clear by-laws (working together with a shareholders' agreement) prevent disputes about how the corporation is run. Without by-laws, you default to whatever the OBCA says, which may not always fit your situation.