Corporate Law Developments February 3, 2017

This week's corporate law news roundup includes discussions of the American Bar Association's release of its first complete revision to the Model Business Corporation Act since 1984; the continued adoption (or consideration) by U.S. states of legislation allowing the incorporation of benefit corporations (for-profit corporations that voluntarily meet higher standards of corporate purpose, accountability and transparency by enabling directors to consider the interests of workers, society and the environment as well as those of stockholders), with 31 U.S. states now having benefit corporation legislation and another 8 states considering such legislation; and the unlikelihood that the proposed U.S. Consumer Financial Protection Bureau (CFPB) rules prohibiting mandatory arbitration clauses in consumer contracts will be finalized in the near or medium term now that the anti-consumer regulation Trump administration has come into office.

IN FIRST COMPLETE REVISION TO MODEL BUSINESS CORPORATION ACT SINCE 1984, AMERICAN BAR ASSOCIATION RELEASES 2016 MODEL BUSINESS CORPORATION ACT

The American Bar Association announced in December 2016 that it has published its first complete revision to the Model Business Corporation Act (2016 Revision) since 1984. The MBCA is a free-standing business corporation statute that may be enacted in its entirety by a state legislature, and is the basis for the business corporation statute in 32 states (notably excluding Delaware, New York and California) and the District of Columbia (and the source for many provisions in other states' general corporation statutes). The MBCA also is an important and often-cited reference for courts, lawyers and scholars. The new publication includes all amendments to the MBCA and its Official Comment through September 2016 and is a compilation of work in progress from the ABA Business Law Section's "Corporate Laws Committee" since 2010. Some notable changes since 2013 are provisions enabling ratification of defective corporate actions, permitting corporations to include in their articles provisions that limit or eliminate a director's or officer's duty to present a business opportunity to the corporation, and clarifying the scope and operation of qualifications for nomination and election as directors. There are also amendments to procedures for approving fundamental corporate changes, quorum and voting requirements and liquidating distributions, and revised language regarding oversight...