Business Associations: Agency, Partnerships, LLCs, and Corporations, 2026 Statutes and Rules - Stephen M. Bainbridge

Business Associations: Agency, Partnerships, LLCs, and Corporations, 2026 Statutes and Rules Stephen M. Bainbridge ISBN 9798317704148

This edition reflects recent amendments to both the Model Business Corporation Act (MBCA) and the Delaware General Corporation Law (DGCL).

The MBCA updates focus on appraisal rights and affect Sections 1.40 and 6.40, as well as Chapter 13.

The DGCL revisions incorporate changes enacted through Senate Bills 21 and 95. Senate Bill 21 significantly revised Sections 144 and 220. As amended, Section 144 establishes clear safe harbors for transactions involving interested directors, officers, or controlling stockholders when such transactions are approved by an informed, disinterested majority of directors or stockholders. It also clarifies that transactions involving a controlling stockholder may receive business judgment review—rather than the more demanding “entire fairness” standard—if approved by either an independent committee or a majority of disinterested stockholders, eliminating the prior requirement that both approvals be obtained. In addition, Section 144 now includes a statutory definition of “controlling stockholder,” requiring at least one-third ownership combined with managerial authority.

Amended Section 220 narrows the scope of “books and records” available for shareholder inspection. It generally limits access to formal board-level materials and presumptively excludes informal communications, such as emails and text messages, from inspection demands.

Senate Bill 95 introduced three major reforms. First, it expanded forum selection provisions by amending Section 115 to allow corporations to designate courts for a broader range of claims, including those beyond internal corporate matters, while prohibiting corporations from excluding Delaware state or federal courts and requiring that federal claims remain eligible for filing in the U.S. District Court for the District of Delaware. Second, it further restricted fee-shifting provisions by extending the prohibition on charter or bylaw terms that impose legal fee liability on stockholders in unsuccessful suits to all claims brought by stockholders in that capacity or on behalf of the corporation. Third, it codified the Delaware Supreme Court’s decision in Salzberg v. Sciabacucchi, confirming that protections applicable to internal corporate claims also extend to related “intra-corporate affairs” claims, including those arising under the Securities Act of 1933.

Business Associations: Agency, Partnerships, LLCs, and Corporations, 2026 Statutes and Rules Stephen M. Bainbridge ISBN 9798317704148, 979-8317704148 & 9798317704728

Author
Stephen M. Bainbridge