What is required for the adoption of by-laws in a corporation?

The adoption of by-laws in a corporation necessitates both the board of directors’ approval and shareholder ratification. This process ensures that the governing rules and regulations of the corporation not only have the endorsement of those who manage the corporation (the board) but also reflect the interests and consent of the shareholders who have a vested interest in the corporation.

This dual requirement is essential because by-laws serve as a foundational document that dictates the internal management structure, operational procedures, and the rights and responsibilities of all parties involved in the corporation. The board of directors initially formulates these by-laws, presenting them to shareholders for their approval, thus fostering a system of checks and balances and encouraging alignment between management and ownership.

The other options do not encompass the complete process required for the adoption of by-laws. Approval by shareholders only neglects the necessary role of the board in drafting and initiating the by-laws. Sole reliance on the SEC for approval would overlook the internal governance process that uniquely pertains to each corporation. Lastly, a majority vote from the public is not relevant in the context of corporate by-laws, as these documents pertain specifically to the internal workings of the corporation rather than the external public.