The Model Business Corporation Act (the “Model Act” or “MBCA”) serves as a key framework for corporate entities in the United States, frequently referenced alongside the Delaware General Corporation Law. To date, thirty-six jurisdictions have adopted the Model Act, either in whole or in part. First published in 1950 by the Corporate Laws Committee (“Committee”) of the American Bar Association (“ABA”) Business Law Section, the Model Act aroused significant interest from the business community. Over the past seventy-five years, it has been subject to ongoing review and refinement by the Committee.
At the recent ABA Business Law Section 2025 Fall Meeting, held in Toronto, the Committee presented a program focusing on key considerations in connection with the seventy-five years of existence of the Model Act, titled “75 Years Young: The Model Business Corporation Act and Its Relevance for Corporate Law Today.” The panel discussion, moderated by Steven Hass, Partner at Hunton Andrews Kurth, featured insights from Maureen Gershanik, Partner at Fishman Haygood; Claudia Allen, Senior Advisor at KPMG Law; Daniel Witschey Jr., Of Counsel at Bracewell; and Heyward Armstrong, Partner at Smith Anderson. All panelists are members of the Committee.
Continuous Relevance of the Model Act
The panelists highlighted the growing importance and influence of the Model Act since its inception. The discussion began with introductory observations from the moderator, Hass, who emphasized the Act’s enduring relevance, noting, “If you group up the Model Act states . . . , the Model Act is actually by far the predominant source of corporate law in this country and governs far more corporations than Delaware does.” Witschey then provided a detailed historical overview of amendments to the Act that addressed, among other things, issues relating to developments in states. He highlighted that from 1950 to the present, the Model Act has been actively maintained and subject to numerous revisions. Among the most notable was the 1974 introduction of a standard of care for directors, one of the Act’s distinguishing provisions when compared with Delaware law.[1] During this presentation, Hass drew attention to amendments in the mid-2000s emphasizing officers’ duties to inform others of material violations of law and enabling a corporation to change the plurality voting standard in director elections to a majority voting standard. Providing background information on these revisions, and more specifically the change on plurality voting, he explained that they occurred in the wake of the financial accounting scandals of Enron and WorldCom and reflected growing demands from investors for more board accountability to enable these changes. His remarks underscored how the Model Act has evolved over time in direct response to market developments and stakeholder expectations.
Monitoring and Updating Process for the Model Act
The panelists also examined how the Committee continuously monitors legal and business developments to ensure the Model Act remains current. Allen explained that in reviewing the legal landscape, the Committee is particularly mindful of its primary constituency, which is private companies rather than large public corporations.
When the Committee determines that revisions are warranted, proposed amendments follow a three-step review process, as outlined in the Committee’s recent article The Model Business Corporation Act at 75.[2] In response to a question about whether changes often originate from external feedback, such as reaching out to the Committee and identifying an issue in practice or forwarding a decision from a Model Act state, Allen confirmed that this occurs from time to time. She provided, as an example, the revision of the Model Act’s indemnification provision, which was prompted by an issue identified by an individual. She encouraged the public to reach out to the Committee regarding practical challenges in applying the Act, stating, “We really encourage hearing from people. We want to know if the statute works.”
On this point, Gershanik emphasized that while the Committee can move swiftly in addressing certain issues, it also follows formal protocols that take time. “We still have a deliberative process,” she noted, adding that this approach enhances the quality of the Committee’s work and ensures that revisions provide well-considered solutions to emerging issues.
The discussion concluded with an overview of defining aspects of the Model Act, underscoring the Committee’s longstanding efforts to promote clarity, efficiency, and consistency while reducing areas of dispute and litigation.
ABA Model Business Corporation Act Resource Center
Armstrong provided an overview of the resources available on the ABA website relating to the Model Act, collected in the Model Business Corporation Act Resource Center. These include the current version of the Model Act, the Model Act Enactment Toolkit, relevant ABA publications, past issues of the Committee’s MBCA Newsletter, and more. Such materials are designed to assist a wide range of stakeholders, from practitioners advising on the Model Act to states considering adopting its provisions.
The Committee emphasized its commitment to supporting both Model Act and non–Model Act jurisdictions in related initiatives and invited the public to engage with its work. As Armstrong noted, “If you are in a bar association or other organization and you are part of helping a state maybe make amendments to its corporate law, . . . please come to see me after this—I want to talk to you.”
Looking ahead, and in light of the numerous initiatives underway across the country to revise state codes, it will be interesting to observe the extent to which the Model Act gains traction in non–Model Act jurisdictions.
To learn more, view the program as on-demand CLE, free for Business Law Section members.
Corporate Laws Committee, A.B.A. Business Law Section, The Model Business Corporation Act at 75, 80 Bus. L. 669 (2025). ↑
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