The Model Business Corporation Act ( MBCA ) is a model act promulgated and periodically amended by the Corporate Laws Committee of the Business Law Section of the American Bar Association ( Committee ). The MBCA had been adopted by 36 states and other jurisdictions. The MBCA provides a modern body of statutory corporate law that is regularly updated by the Committee based on judicial decisions, recent legislative enactments and other legal and technological developments. It is a well-organized and clearly-written statute for business (stock) corporations that covers a number of areas, including formation, governance and director conduct and liability. The MBCA has been influential in shaping standards for United States corporate law .
8-414: The MBCA has three principal benefits. First, by distilling many matters into black-letter law, it provides guidance on issues that have often been the subject of dispute and litigation (e.g., directors’ duties). This can promote clarity, consistency and certainty in business transactions. Second, adopting jurisdictions can take advantage of extensive knowledge about how to practice under it, as expressed in
16-487: A Uniform Business Corporation Act, which was subsequently adopted by three states, Louisiana, Washington and Kentucky, and partially adopted by a fourth, Idaho. Although uniform state legislation offers benefits in certain areas, such as interstate commerce, i.e. the Uniform Commercial Code, these benefits are less significant in corporation law where the "internal affairs" of a corporation are generally governed by
24-741: The Committee has recently adopted new changes to provisions regarding the use of electronic mail. The MBCA 2016 Revision incorporates terminology consistent with the Model Entity Transactions Act ( META ) and the Uniform Business Organizations Code ( UBOC ), as well as the recently adopted fourth edition of the Model Nonprofit Corporation Act. In 1928, the Commissioners on Uniform State Laws promulgated
32-802: The Committee’s ongoing efforts to keep it current and relevant. It has been amended regularly since then. The MBCA has been adopted in the following 36 jurisdictions: Alabama (2016 Revision), Alaska (1969 version), Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida (2016 Revision), Georgia, Guam, Hawaii, Idaho (2016 Revision), Indiana, Iowa (2016 Revision), Kentucky, Louisiana, Maine, Massachusetts, Mississippi, Montana (2016 Revision), Nebraska, New Hampshire, New Mexico (1969 version), North Carolina, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia (2016 Revision), Washington, West Virginia, Wisconsin and Wyoming. Currently, most MBCA jurisdictions have statutes based upon
40-496: The Official Comment (which a legislature may incorporate into its legislative history), as well as many years of practice experience, judicial interpretations and commentary. Third, the model act is maintained and regularly updated by the Committee, and these (and related) developments are widely available on the Committee's website, making it comparatively easy for jurisdictions to maintain up-to-date corporate laws. For example,
48-531: The issues, as opposed to the concept of a "uniform" law. The Committee undertook to review and suggest revisions to the Model Business Corporation Act with the goal of producing a model in a simple style, with direct language that would set a pattern which states could follow, not uniformly, but as a style book and a suggestion of content. In 1950, the Committee promulgated its own Model Business Corporation Act. The Uniform Business Corporation Act
56-537: The laws of its state of incorporation. As result of the resistance to the concept of a uniform corporation law, the Uniform Business Corporation Act was withdrawn as a "uniform" act in 1943 and renamed “A Model or State Business Corporation Act”. As a “model" act it was intended to provide states with the opportunity depart from the model in ways that would recognize special local considerations and would allow experimentation with different approaches to
64-552: Was withdrawn by the Uniform Laws Commissioners in 1958. After that, the Committee continued to review and periodically revise the MBCA, and, in 1984, it published a complete revision. Since 1984, the Committee has continued to review and periodically revise various provisions of the MBCA. The 1984 version has been amended on numerous occasions since it was adopted by the Committee and was significantly revised in 2016 as part of
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