I don’t know about you, but I feel like this year has been a sort of tipping point in terms of the importance of state laws and regulatory initiatives. From the corporate law perspective, the “DExit” conversation has been forcing me to pay attention to more than just the Court of Chancery and the DGCL – even beyond the “primary” challengers of Nevada and Texas.

All that to say, it seems fitting that 2025 also marks 75 years for the Model Business Corporation Act. This paper from Steven Haas and Jonathan Lipson – published by the ABA Corporate Laws Committee – walks through the MBCA’s history and responsiveness to changes affecting companies – such as technology updates, the financial crisis, and pandemic-era issues.

According to the ABA’s MBCA Resource Center, 36 jurisdictions have adopted some form of the MBCA. The white paper explains why that’s a good thing – here are a few paraphrased reasons:

1. It’s a free-standing statute that can be enacted in its entirety or tailored as appropriate. It’s a “model” – rather than a “uniform” – statute.

2. It’s designed to be modern, complete, flexible, and relatively simple. Experienced lawyers drafted the MBCA and regularly review and update it – so states can rely on that work product instead of reinventing the wheel.

3. The MBCA is regularly updated to reflect corporate law developments, including judicial decisions, new federal or state laws, evolving corporate governance practices, new technology, and the changing needs of businesses.

4. The Model Act distills numerous corporate law issues into “black letter” law – including when there is not judicial precedent. This helps increase certainty in planning transactions. The black letter approach also reduces the need to rely on common law, which is particularly valuable to jurisdictions that lack a large body of judicial precedent or experienced business courts.

5. There’s an “Official Comment” – and annotated statute – that provide valuable guidance in interpreting the MBCA. You can also look at courts in other states to see how they’ve interpreted the MBCA. These extra resources are key if you’re an associate in an MBCA jurisdiction, where the commentary around your state’s statute may not cover every issue. (Ask me how I know…)

6. The MBCA allows for a lot of private ordering, through articles, bylaws and shareholder agreements.

If you’re wondering why we waited until November to celebrate the Model Act, it’s not just because the relevance of state law exceeded what we may have expected back in January, or that this paper only recently came to my attention. It’s also because I’m focused on birthdays this week. My middle child turned 8 earlier this week, and – as I’ve previously shared – it’s the only time of year he gets our full attention!

– Liz Dunshee