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
Association and is followed by twenty-four states.
The MBCA was created
after World War II in 1950 due to
variation in how states defined corporations. 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.
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