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THE NEW MASSACHUSETTS BUSINESS CORPORATION ACT

The newly adopted Massachusetts Business Corporation Act (G.L. c. 156D) is the first major overhaul of corporate law in Massachusetts since 1964.  Much about the way business and commerce is conducted has changed in those forty years, a period which has witnessed a communications and technological revolution which is still evolving at the speed of light.

Based on the Model Business Corporation Act (which is the basis for the corporate statutes of thirty states, including all of the rest of New England), the Massachusetts version standardizes and updates many provisions, reflecting those changes.

For example, shareholder and director meetings and votes can now take place in cyberspace, and provision is made for less than unanimous actions by shareholder consent, without the need of a meeting or notice.  Likewise, the number of required directors and the available methods for their election have changed, and annual meetings may be held at any time of the year.  There are new requirements for the maintenance of a registered office and the appointment of a resident agent, and for the maintenance of a corporate minute book.

In order to take advantage of several of these changes in the law (e.g. non-unanimous actions by consent and fewer directors) revisions to existing by-laws must be adopted.  We recommend that all Massachusetts corporations conduct a legal audit of their Articles of Organization and By-Laws in order to insure compliance with the new Act and in order to take advantage of the new flexibility in corporate structure and governance it provides.

Of more immediate concern is the need to designate a registered office and to appoint a resident agent.  A registered office is a concept new to Massachusetts corporations law.  It may be different than any of the business addresses of the corporation, and it must be a place where the resident agent can be found and the place where the corporate minute book is kept.  In most cases, the minute book is kept by the corporation’s general counsel or accountant.  It therefore makes sense for that office to be designated as the registered office, and for that person to be appointed registered agent.   If you are enrolled in Wilson & Orcutt, P.C.’s Corporate Maintenance Plan, we already keep and maintain your minute book, and we recommend that we also be appointed as your registered agent and that our offices be designated as your registered office.  These services are being added to our Corporate Maintenance Plan without any increase in cost.  If you are not enrolled, and would like further information, please feel to contact us.