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The
Model Business Corporation Act (MBCA) is a model set of law prepared by the Committee on Corporate Laws of the Section of Business Law of the
American Bar AssociationThe American Bar Association , founded August 21, 1878, is a voluntary bar association of lawyers and law students, which is not specific to any jurisdiction in the United States. The ABA's most important stated activities are the setting of academic standards for law schools, and the formulation...
and is followed by twenty-four states.
History
It was created due to variation in how states defined
corporationA corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
s after
World War IIWorld War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
in 1950. The variation and uncertainty resulted in many lawsuits in which a promoter was sued personally for obligations ostensibly incurred in the name of the nascent corporation. The widespread adoption of the MBCA brought some clarity to such confusion and other corporate law issues. Most states are now guided by the Revised Model Business Corporation Act (RMBCA), a revised version of the MBCA.
Use of Model
The
Model Business Corporation Act (2002) is used by twenty-four states. A partial list is as follows.
See also
- US corporate law
- Delaware General Corporation Law
- Securities and Exchange Act
- UK company law