DGCL 109 Bylaws: Scope, Limits, and Adoption Process

Section 109 of the Delaware General Corporation Law sets the rules for who can adopt, amend, or repeal a Delaware corporation’s bylaws and what those bylaws are allowed to say. In short, stockholders always hold the power to act on bylaws; the certificate of incorporation can also give that power to the board; and bylaws can regulate almost anything about the corporation’s business or its stockholders, directors, officers, and employees, as long as the provision doesn’t conflict with Delaware law or the certificate of incorporation.

Who Can Adopt or Change Bylaws

Section 109(a) assigns bylaw authority in a sequence. Before the corporation has received any payment for its stock, the incorporators may adopt the original bylaws. If the certificate of incorporation names initial directors, those directors may also adopt bylaws during that pre-payment window. Once the corporation has received payment for stock, the power to adopt, amend, or repeal bylaws moves to the stockholders entitled to vote.¹

A corporation can expand that default. The certificate of incorporation may grant the board of directors concurrent authority to adopt, amend, or repeal bylaws, and most Delaware corporations include that grant so the board can handle routine procedural updates without calling a stockholder vote.

The grant to the board never takes anything away from the stockholders. Section 109(a) states that conferring bylaw power on the directors “shall not divest the stockholders . . . of the power, nor limit their power to adopt, amend or repeal bylaws.”¹ Both groups can act, but stockholders retain the final word. Delaware law also provides a specific backstop: a stockholder-adopted bylaw that specifies the vote required to elect directors cannot be amended or repealed by the board.²

What Bylaws Are Allowed to Cover

Section 109(b) sets a wide scope. Bylaws may contain any provision relating to the business of the corporation, the conduct of its affairs, and the rights or powers of its stockholders, directors, officers, or employees.³ In practice, bylaws typically address:

The date, time, and location (or remote communication method) for annual stockholder meetings and how special meetings get called.⁴
Quorum requirements for stockholder meetings, which can be set in the certificate or bylaws but never below one-third of the shares entitled to vote.²
Notice of meetings, which the DGCL requires be given no fewer than 10 and no more than 60 days before the meeting date to each stockholder entitled to vote.⁵
Officer positions, their duties, and how vacancies are filled.
Advance notice requirements for stockholders submitting director nominations or other business, often 30 to 120 days before the annual meeting.
Indemnification rights for directors and officers, which many corporations use to convert the permissive indemnification allowed under Section 145 into a binding obligation.
Forum selection provisions. Section 115 permits the certificate or bylaws to require that internal corporate claims be brought exclusively in Delaware courts, and the Court of Chancery has treated such provisions as squarely within the Section 109(b) scope.⁶⁷

Where the certificate of incorporation sets the corporation’s fundamental structure, the bylaws fill in the operating procedures.

What Section 109 Does Not Allow

The same sentence that grants broad bylaw authority also limits it. No bylaw may contain any provision “not inconsistent with law or with the certificate of incorporation.”³ That creates a strict hierarchy: the DGCL on top, then the certificate of incorporation, then the bylaws. A bylaw that conflicts with either higher authority is void.

The consequences are concrete. A bylaw cannot eliminate the stockholder inspection right in Section 220, which guarantees access to the stock ledger, bylaws, meeting minutes, board materials, and financial statements upon a written demand stating a proper purpose.⁸ A bylaw cannot drop the stockholder quorum below the one-third floor. And a bylaw cannot strip the board of its management authority under Section 141(a) unless the certificate itself provides an alternative structure.⁹

No Fee-Shifting Against Stockholders

Section 109(b) also contains an explicit prohibition added in 2015. Bylaws may not impose liability on a stockholder for the attorneys’ fees or expenses of the corporation or any other party in connection with an internal corporate claim (as defined in Section 115) or any other claim brought by a stockholder in that capacity or in the right of the corporation.³ The ban followed a wave of corporate bylaws designed to discourage stockholder suits by forcing losing plaintiffs to pay the company’s legal bills.

How a Bylaw Amendment Actually Gets Adopted

The procedure depends on who’s acting and whether the action happens at a meeting.

Board Action

When the certificate grants the board bylaw authority, the directors can adopt, amend, or repeal bylaws at any properly noticed board meeting where a quorum is present. The board must still respect the DGCL, the certificate, and any stockholder-adopted bylaw the board lacks authority to override, such as an election-related bylaw protected by Section 216.

Stockholder Action at a Meeting

For stockholder-level action, the corporation first sets a record date to determine who is entitled to notice and to vote. The board fixes that date, which cannot be more than 60 or fewer than 10 days before the meeting; if the board fails to set one, it defaults to the close of business on the day before notice is given.¹⁰ Notice then goes to each stockholder entitled to vote within the same 10-to-60-day window.⁵ A special meeting notice must state the purpose.

At the meeting, a quorum must be present. Unless the certificate or bylaws say otherwise, a quorum is a majority of the shares entitled to vote, and a bylaw amendment passes on the affirmative vote of a majority of the shares present and entitled to vote on the matter.²

Stockholder Action by Written Consent

Stockholders do not always need a meeting. Section 228 permits action by written consent, without a meeting or prior notice, if consents signed by holders of at least the minimum number of votes needed to authorize the action at a fully attended meeting are delivered to the corporation within 60 days of the earliest dated consent.¹¹ That right exists unless the certificate specifically prohibits it, and many public companies do prohibit it.

When action is taken by less-than-unanimous consent, the corporation must promptly notify stockholders who did not sign but would have been entitled to notice of a meeting. Consents can be delivered electronically if the corporation can verify sender identity and transmission date. Once adopted, the amendment should be recorded in the corporate minute book with the current bylaws.

Emergency Bylaws Under Section 110

Section 109 is not the only pathway. Section 110 lets the board adopt emergency bylaws that operate during crises such as attacks on the United States, nuclear disasters, pandemics, declared national emergencies, or other catastrophic conditions. If a quorum cannot be readily convened, a majority of whatever directors are present may adopt them.¹²

Emergency bylaws can override provisions elsewhere in the DGCL, the certificate, or the regular bylaws. They can authorize any officer or director to call a board meeting, reduce quorum to the directors who attend, and designate successor officers or directors from a pre-approved list. Anyone acting under emergency bylaws is protected from liability except for willful misconduct. Stockholders retain the right to repeal or change them once conditions stabilize.

Extra Steps for Public Companies

If the corporation has equity securities registered under Section 12 of the Securities Exchange Act, bylaw amendments trigger federal filings on top of the state-law adoption process. The company must file a Form 8-K within four business days of any bylaw amendment that was not previously disclosed in a proxy statement, describing the provision that was adopted or changed and, if applicable, the previous version.¹³

Current bylaws also have to be maintained as an exhibit to periodic filings. Under Regulation S-K, any amendment or modification to a previously filed exhibit on Form 10-K or 10-Q must be filed as an exhibit on the next Form 10-K or 10-Q, so investors can always pull the governing documents through EDGAR.¹⁴

1
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter I
2
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter VII – Section 216
3
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter I – Section 109
4
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter VII – Section 211
5
Justia. Delaware Code Title 8 Section 222 – Notice of Meetings and Adjourned Meetings
6
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter I – Section 115
7
Delaware Court of Chancery. Boilermakers Local 154 Retirement Fund v. Chevron Corp.
8
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter VII – Section 220
9
Justia. Delaware Code Title 8 Section 141 – Board of Directors; Powers; Number, Qualifications, Terms and Quorum
10
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter VII – Section 213
11
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter VII – Section 228
12
Delaware Code Online. Delaware Code Title 8 – Corporations, Subchapter I – Section 110
13
U.S. Securities and Exchange Commission. Form 8-K – Item 5.03
14
eCFR. 17 CFR 229.601 – Exhibits