November 06, 2020

Model Business Corporation Act 1999—2020

Model Business Corporation Act 1999—2020

Changes in the Model Business Corporation Act—Fundamental Changes
      Committee on Corporate Laws, 54(2): 685–756 (Feb. 1999)
A Task Force of the Committee and the Committee itself deliberated extensively concerning the provisions of the Model Act relating to mergers, transfers of assets, share exchanges, amendments of the articles of incorporation, and share issuances in other transactions, with a view to harmonizing the disparate voting rights of shareholders that may apply to corporate transactions that have essentially the same financial or other fundamental effect on the corporation or its shareholders.

Changes in the Model Business Corporation Act Pertaining to the Standards of Conduct for Officers; Inspection Rights and Notices—Final Adoption
      Committee on Corporate Laws, 54(3): 1229–31 (May 1999)
This Report notes the Committee's approval of the proposed amendments to chapter 16 as published in 53 BUS. LAW. 815. The Report also notes the approval of section 8.42, and its Official Comment, as published in 53 BUS. LAW. 815 and revised in the present Report.

Changes in the Model Business Corporation Act Pertaining to Directors and Officers
      Committee on Corporate Laws, 54(3): 1233–60 (May 1999)
This Report contains the text of proposed amendments to sections 8.01, 8.03, 8.06, 8.09, 8.25, 8.40, and 8.43, and the Official Comments to those sections, as approved by the Committee.

Changes in the Model Business Corporation Act Pertaining to Appraisal Rights and to Fundamental Changes—Final Adoption
      Committee on Corporate Laws, 55(1): 405–06 (Nov. 1999)
This Report notes the Committee's approval of the proposed amendments to chapter 13 as published in 54 BUS. LAW. 209. The Report also notes the approval of the fundamental changes provisions as published in 54 BUS. LAW. 685 and revised in the present Report.

Changes in the Model Business Corporation Act—Dissolution
      Committee on Corporate Laws, 55(3): 1227–45 (May 2000)
This Report contains the text of proposed amendments to subchapter A of chapter 14, section 6.40, and section 8.33, as approved by the Committee, and the Official Comments to those provisions.

Changes in the Model Business Corporation Act—Amendments Pertaining to Directors and Officers
      Committee on Corporate Laws, 55(3): 1247–53 (May 2000)
This Report notes the Committee's approval of the proposed amendments to sections 8.01, 8.03, 8.06, 8.25, 8.40, and 8.43, and the Official Comments to those sections, as published in 54 BUS. LAW. 1233 and revised in the present Report.

Changes in the Model Business Corporation Act Pertaining to Dissolution-Final Adoption
      Committee on Corporate Laws, 56(1): 83 (Nov. 2000)

Changes in the Model Business Corporation Act-Proposed Amendments Relating to Directors
      Committee on Corporate Laws, 56(1): 85 (Nov. 2000)

Some Comparisons Between the Model Business Corporation Act and the Delaware General Corporation Law
      Michael P. Dooley and Michael D. Goldman, 56(2): 737 (Feb 2001)
Although Delaware continues to be the most important corporate law jurisdiction, the Model Business Corporation Act has been very influential as a statutory model. In the course of considering the success of the Model Act in terms of state adoptions, this Article explores the salient differences and similarities between the two statutes. Among the specific topics considered are statutory approaches to capital structure, director conduct, liability and conflicts, close corporations, fundamental changes, appraisal, shareholder voting, indemnification and dissolution. While finding that the two statutes share much common ground, this Article also identifies a pervasive difference in drafting approach, with the Model Act featuring a more directive, bright line approach than the Delaware General Corporation Law. This difference is attributed not to any underlying policy disagreement between the statutes but to differences in the constituencies, including courts and corporate counsel, that the two statutes are designed to serve.

Changes in the Model Business Corporation Act-Amendments Relating to Directors
      Committee on Corporate Laws, 56(3): 875 (May 2001)

Changes in the Model Business Corporation Act-Proposed Amendments Relating to Domestications and Conversions
      Corporate Laws Committee, 56(4): 1633 (Aug. 2001)

Changes in the Model Business Corporation Act Pertaining to Shares and References in Documents to Extrinsic Facts
      The Committee on Corporate Laws, 57(1): 355 (Nov. 2001)

Changes in the Model Business Corporation Act—Amendments Pertaining to Shares and References in Documents to Extrinsic Facts
      The Committee on Corporate Laws, 57(4): 1665–66 (Aug. 2002)

Changes in the Model Business Corporation Act Relating to Domestication and Conversion—Final Adoption
      By the Committee on Corporate Laws, 58(1): 219–294 (Nov. 2002)

Changes in the Model Business Corporation Act-Proposed Amendments Relating to Chapter 1 and Chapter 8 (including Subchapter F and G and Duties of Directors and Officers)
      Committee on Corporate Laws, ABA Section of Business Law, 59(2): 569–688 (Feb. 2004)

Changes in the Model Business Corporation Act—Proposed Amendments Relating to Chapters 1, 7, and 8
      The Committee on Corporate Laws, ABA Section of Business Law , 60(1): 341—394 (Nov. 2004)

Changes in the Model Business Corporation Act--Proposed Amendments to Chapters 1, 7, and 14 with Conforming Amendments to Related Provisions of the Act
      Committee on Corporate Laws, ABA Section of Business Law, 60(4): 1577—1634 (August 2005)

Changes in the Model Business Corporation Act—Proposed Amendments elating to Appraisal and Other Remedies
      Committee on Corporate Laws, ABA Section of Business Law, 61(2):659—678 (February 2006)

Empty Voting and Hidden (Morphable) Ownership: Taxonomy, Implications, and Reforms
     Henry T. C. Hu and Bernard Black, 61(3):1011–1070 (May 2006)
Most American publicly held corporations have a one-share, one-vote structure, in which voting power is proportional to economic ownership. This structure gives shareholders economic incentives to exercise their voting power well and helps to legitimate managers' exercise of authority over property the managers do not own. Berle-Means' "separation of ownership and control" suggests that shareholders face large collective action problems in overseeing managers. Even so, mechanisms rooted in the shareholder vote, including proxy fights and takeover bids, constrain managers from straying too far from the goal of shareholder wealth maximization.

In the past few years, the derivatives revolution, hedge fund growth, and other capital market developments have come to threaten this familiar pattern throughout the world. Both outside investors and corporate insiders can now readily decouple economic ownership of shares from voting rights to those shares. This decoupling—which we call "the new vote buying"—is often hidden from public view and is largely untouched by current law and regulation. Hedge funds, sophisticated and largely unfettered by legal rules or conflicts of interest, have been especially aggressive in decoupling. Sometimes they hold more votes than economic ownership, a pattern we call "empty voting." That is, they may have substantial voting power while having limited, zero, or even negative economic ownership. In the extreme situation of negative economic ownership, the empty voter has an incentive to vote in ways that reduce the company's share price. Sometimes hedge funds hold more economic ownership than votes, though often with "morphable" voting rights—the de facto ability to acquire the votes if needed. We call this "hidden (morphable) ownership" because under current disclosure rules, the economic ownership and (de facto) voting ownership are often not disclosed. Corporate insiders, too, can use new vote buying techniques.

This article analyzes the new vote buying and its corporate governance implications. We propose a taxonomy of the new vote buying that unpacks its functional elements. We discuss the implications of decoupling for control contests and other forms of shareholder oversight, and the circumstances in which decoupling could be beneficial or harmful to corporate governance. We also propose a near-term disclosure-based response and sketch longer-term regulatory possibilities. Our disclosure proposal would simplify and partially integrate five existing, inconsistent share-ownership disclosure regimes, and is worth considering independent of its value with respect to decoupling. In the longer term, other responses may be needed; we briefly discuss possible strategies focused on voting rights, voting architecture, and supply and demand forces in the markets on which the new vote buying relies.

Changes in the Model Business Corporation Act–Amendments to Chapters 1, 7 and 14 with Conforming Amendments to Related Provisions of the Act
      Committee on Corporate Laws, ABA Section of Business Law, 61(3):1183—1190 (May 2006)

Changes in the Model Business Corporation Act–Proposed Amendments Relating to Chapters 8 and 13
      Committee on Corporate Laws, ABA Section of Business Law, 61(3):1191—1196 (May 2006)

The Uncertain Efficacy of Executive Sessions Under the NYSE's Revised Listing Standards
     Robert V. Hale II, 61(4):1413-1426 (August 2006)
This article briefly explores key issues relating to the use of non-management executive sessions under Section 303A.03 of the NYSE's revised listing standards, including the authority of the SEC to enforce such a requirement, the status of board actions taken at such meetings, and whether such sessions may result in altering the principal roles of the board and management. In this respect, the Disney derivative litigation affords an opportunity to consider the use of executive sessions in relation to these issues, as well as the business judgment rule. Moreover, Disney raises the question whether mandatory non-management executive sessions might have created a different outcome under the circumstances in the case. The article concludes with a discussion of some practical considerations for attorneys and corporate secretaries in complying with the requirement.

Changes in the Model Business Corporation Act-Amendments to Chapter 7 and Related Provisions Relating to Shareholder Action Without a Meeting, Chapters 8 and 10 Relating to Shareholder Voting for the Election of Directors, and Chapter 13 Relating to Appraisal and Other Remedies for Fundamental Transactions
     Committee on Corporate Laws, ABA Section of Business Law, 61(4):1427–1438 (August 2006)

Changes in the Model Business Corporation Act—Amendments Relating to Chapters 8 and 13
      Committee on Corporate Laws, ABA Section of Business Law, 62(3): 1061–1064 (May 2007)

Corporate Director's Guidebook, Fifth Edition
      Committee on Corporate Laws, ABA Section of Business Law, 62(4): 1479–1554 (August 2007)

Changes in the Model Business Corporation Act—Proposed "Force the Vote" Amendments to Chapters 8, 9, 10, 11, 12 and 14
      Committee on Corporate Laws, ABA Section on Business Law, 63(2): 511–524 (February 2008)

Changes in the Model Business Corporation Act—Proposed Amendment to Section 6.24
      Committee on Corporate Laws, ABA Section of Business Law, 63(2): 525–530 (February 2008)

Changes in the Model Business Corporation Act–Amendment to Section 6.24, Adoption of Section 8.26 ("Force the Vote") and Related Amendments to Chapters 9, 10, 11, 12, and 14
      Committee on Corporate Laws, ABA Section of Business Law, 63(4): 1275#151;1276 (August 2008)

Changes in the Model Business Corporation Act—Proposed Amendments to Incorporate Electronic Technology Amendments
      Committee on Corporate Laws, ABA Section of Business Law, 64(4): 1129–1156 (August 2009)

Changes in the Model Business Corporation Act—Proposed Shareholder Proxy Access Amendments to Chapters 2 and 10
      Committee on Corporate Laws, ABA Section of Business Law, 64(4): 1157–1162 (August 2009)

Report of the Task Force of the ABA Section of Business Law Corporate Governance Committee on Delineation of Governance Roles & Responsibilities
      Task Force of the ABA Section of Business Law Corporate Governance Committee on Delineation of Governance Roles & Responsibilities, 65(1): 107–152 (November 2009)

Changes in the Model Business Corporation Act—Proposed Amendments to Shareholder Voting Provisions Authorizing Remote Participation in Shareholder Meetings and Bifurcated Record Dates
      Committee on Corporate Laws, ABA Section of Business Law, 65(1): 153–160 (November 2009)

Changes in the Model Business Corporation Act—Amendments to Incorporate Electronic Technology Amendments in Section 1.41 and to Adopt Related Amendments
      Committee on Corporate Laws, ABA Section of Business Law, 65(3): 885–886 (May 2010)

Reinterpreting Section 141(e) of Delaware's General Corporation Law: Why Interested Directors Should Be "Fully Protected" in Relying on Expert Advice
     Thomas A. Uebler, 65(4): 1023–1054 (August 2010)
Directors of Delaware corporations often rely on lawyers, economists, investment bankers, professors, and many other experts in order to exercise their managerial power consistently with their fiduciary duties. Such reliance is encouraged by section 141(e) of the General Corporation Law of the State of Delaware, which states in part that directors "shall . . . be fully protected" in reasonably relying in good faith on expert advice. Section 141(e) should provide all directors of Delaware corporations a defense to liability if, in their capacity as directors, they reasonably relied in good faith on expert advice but nevertheless produced a transaction that is found to be unfair to the corporation or its stockholders, as long as the unfair aspect of the transaction arose from the expert advice. The Delaware Court of Chancery, however, has limited the full protection of section 141(e) by confining it to disinterested directors in duty of care cases. That limitation, which is not expressed in the statute, unfairly punishes interested directors who act with an honesty of purpose and reasonably rely in good faith on expert advice because it requires them to serve as guarantors of potentially flawed expert advice. This Article concludes that Delaware courts should reconsider the application and effect of section 141(e) and allow directors, regardless of their interest in a challenged transaction, to assert section 141(e) as a defense to liability in duty of care and duty of loyalty cases if they reasonably relied in good faith on expert advice.

Report on the Roles of Boards of Directors and Shareholders of Publicly Owned Corporations and Changes to the Model Business Corporation Act—Adoption of Shareholder Proxy Access Amendments to Chapters 2 and 10
      Committee on Corporate Laws, ABA Section of Business Law, 65(4): 1105–1118 (August 2010)

Changes in the Model Business Corporation Act—Amendments to Shareholder Voting Provisions Authorizing Remote Participation in Shareholder Meetings and Bifurcated Record Dates
      Committee on Corporate Laws, ABA Section of Business Law, 65(4): 1119–1120 (August 2010)

Changes in the Model Business Corporation Act—Proposed Amendments to Permit Limitations on Separate Group Voting Rights on Certain Mergers, to Delink Voting and Appraisal Rights, and to Make Related Changes
      Committee on Corporate Laws, ABA Section of Business Law, 65(4): 1121–1148 (August 2010)

Changes in the Model Business Corporation Act—Proposed Amendment to Section 8.58
      Committee on Corporate Laws, ABA Section of Business Law, 65(4): 1149–1152 (August 2010)

Changes in the Model Business Corporation Act—Amendment to Section 7.22 Relating to Irrevocable Proxies and Adoption of Section 7.29A Providing for Judicial Review of Corporate Elections, Shareholder Votes, and Other Corporate Governance Disputes
     Corporate Laws Committee, ABA Section of Business Law, 67(3): 728-730 (May 2012)

Changes in the Model Business Corporation Act - Proposed Amendment to Section 14.34
     Corporate Laws Committee, ABA Section of Business Law, 67(3): 731-732 (May 2012)

Changes in the Model Business Corporation Act—Proposed Amendments to Section 7.23, Definitions in Section 1.40 and Related Sections
     Corporate Laws Committee, ABA Section of Business Law, 68(1): 137 - 154 (November 2012)

Changes in the Model Business Corporation Act—Amendment to Section 14.34 Relating to Court-Ordered Dissolution
     Corporate Laws Committee, ABA Section of Business Law, 68(1): 155 - 156 (November 2012)

Changes in the Model Business Corporation Act—Proposed Amendments to Sections 7.30 & 7.32 Removing Automatic 10 Year Limit
     Corporate Laws Committee, ABA Section of Business Law, 68(1): 157 - 162 (November 2012)

Changes in the Model Business Corporation Act—Proposed Amendments to Section 8.02 Relating to Qualifications for Directors and Nominees for Directors
     Corporate Laws Committee, ABA Business Law Section, 68(3): 781-784 (July 2013)

Changes in the Model Business Corporation Act—Amendments to Sections 7.30 & 7.32 Removing Automatic 10-Year Limit on Duration of Voting Trust Agreements and Shareholder Agreements
     Corporate Laws Committee, ABA Business Law Section, 68(4): 1111-1112 (August 2013)

Changes in the Model Business Corporation Act—Proposed Amendments to Sections 7.22, 7.24, and 7.29
     Corporate Laws Committee, ABA Business Law Section, 69(1): 93-106 (November 2013)

Changes in the Model Business Corporation Act-Proposed Amendments to Sections 2.02 and 8.70 (and related changes to 1.43, 8.31 and 8.60) Permitting Advance Action to Limit or Eliminate Duties Regarding Business Opportunity
     Corporate Laws Committee, ABA Business Law Section, 69(3): 717-732 (May 2014)

Changes in the Model Business Corporation Act— Proposed Advance of Expenses Amendments to Sections 8.53 and 8.54
     Corporate Laws Committee, ABA Business Law Section, 69(3): 733-742 (May 2014)

Changes in the Model Business Corporation Act
     Corporate Laws Committee, ABA Business Law Section, 70(1): 175-176 (Winter 2014/2015)

Changes in the Model Business Corporation Act to Section 8.70
     Corporate Laws Committee, ABA Business Law Section, 71(1): 87-92 (Winter 2015/2016)

Changes in the Model Business Corporation Act—Proposed Subchapter E of Chapter 1 Permitting Ratification of Defective Corporate Actions
     Corporate Laws Committee, ABA Business Law Section, 71(1): 93-104 (Winter 2015/2016)

Changes in the Model Business Corporation Act—Proposed Amendments to Section 11.04 and Section 13.02
     Corporate Laws Committee, ABA Business Law Section, 71(1): 105-128 (Winter 2015/2016)

Changes in the Model Business Corporation Act—Proposed Section 2.08
     Corporate Laws Committee, ABA Business Law Section, 71(2): 543-546 (Spring 2016)

Changes in the Model Business Corporation Act—Proposed Amendments to Chapter 16
     Corporate Laws Committee, ABA Business Law Section, 71(2): 547-588 (Spring 2016)

Changes in the Model Business Corporation Act
     Corporate Laws Committee, ABA Business Law Section, 71(4): 1241-1242 (Fall 2016)

Model Business Corporation Act (2016 Revision)
     Corporate Laws Committee, ABA Business Law Section, 72(2): 421-430 (Spring 2017)

Changes in the Model Business Corporation Act—Proposed Amendments to Chapters 7 and 10 Permitting Shareholders’ Meetings Solely by Remote Participation
     Corporate Laws Committee, ABA Business Law Section, 74(1) 151-164 (Winter 2018/2019)

Proposed Changes to the Model Business Corporation Act—New Chapter 17 on Benefit Corporations
     Corporate Laws Committee, ABA Business Law Section, 74(3): 819-832 (Summer 2019)

Changes to the Model Business Corporation Act–Amendments to Chapters 7 and 10 Permitting Shareholders’ Meetings Solely by Remote Participation
     Corporate Laws Committee, ABA Business Law Section, 74(3): 833-834 (Summer 2019)

The Shifting Sands of Conflict of Interest Standards: The Duty of Loyalty Meets the Real World with Questions of Process and Fairness
     Stuart R. Cohn, 74(4): 1077-1104 (Fall 2019)
Standards governing the validity of conflict-of-interest transactions by corporate directors or others in dominant positions have significantly evolved from the early days of strict judicial condemnation to the current statutory provisions. These provisions place great faith in and emphasis on the judgment of disinterested directors or shareholders. This evolution has not been consistent among states, given that substantial variations exist regarding both statutory provisions and judicial interpretations. To illustrate the variations, this article examines and compares the Delaware and Model Business Corporation Act standards. The variations reflect the concerns that arise when a director’s fiduciary duty of loyalty conflicts with the realities and demands of the commercial world. This article examines the evolution of conflict-of-interest standards and existing variations in light of two fundamental issues: (i) whether the combination of statutory and fiduciary standards obligates directors to obtain advance approval of conflict transactions and (ii) the capacity of shareholders to challenge conflict transactions on the grounds of fairness to the corporation, even after board or shareholder approval. The article concludes that statutory and fiduciary standards obligate directors to obtain advance approval of conflict transactions and provides recommendations for addressing these two issues in a manner consistent with statutory provisions and fiduciary standards.

Proposed (Revised) Changes to the Model Business Corporation Act—New Chapter 17 on Benefit Corporations
     Corporate Laws Committee, ABA Business Law Section, 74(4): 1177-1178 (Fall 2019)

Changes in the Model Business Corporation Act—Proposed Amendment to Section 1.40 Governing Notice to Shareholders
     Committee on Corporate Laws, ABA Business Law Section 75(2): 1817-1820 (Spring 2020)

Changes in the Model Business Corporation Act
     Corporate Laws Committee, ABA Business Law Section, 75(4): 2609 (Fall 2020)