By Eric Geringswald

Massachusetts Business Corporation Act

As the Massachusetts Business Corporation Act, commonly referred to by its statutory designation as Chapter 156D, approaches its twentieth year, Massachusetts Attorney Kurt Hemr - Partner in the Boston offices of Skadden, Arps, Slate, Meagher & Flom - reflects on how this top-to-bottom revision of the Commonwealth’s business corporation statute has fared in his special commentary included in the 2022 edition of Massachusetts Laws Governing Business Annotated.

Hemr writes “By any reasonable measure, Chapter 156D must be deemed a success. It has not required substantial amendment or correction. It has not engendered conflict or confusion in its judicial application. It continues to serve as the organizing law for some of the country’s most dynamic public corporations, including Analog Devices, Vertex Pharmaceuticals, State Street Corporation, Eversource Energy, PerkinElmer, Teradyne, Cognex, PTC, and Boston Beer.”

In the commentary, Hemr looks at significant case law created by state and federal courts in Massachusetts since Chapter 156D first became effective, including what he calls “the most critical chapter in the statute’s history,” when the Supreme Judicial Court of Massachusetts took up two appeals regarding the act’s application: Chitwood v. Vertex Pharmaceuticals Inc. and IBEW Local No 129 Benefit Fund v. Tucci.

“In both cases, the SJC took the arguably radical step of taking Chapter 156D at face value, applying the clear language of the statute in recognition of the legislature’s intentional departures from the corporate law of other jurisdictions, most particularly Delaware,” Hemr asserts.

Hemr concludes the piece with a look to the statute’s future, suggesting the legislature to consider forum selection provisions like those in Delaware as a means of assisting Massachusetts corporations in “consolidating their corporate governance litigation in the Commonwealth.”

Although such provisions are not currently addressed in Chapter 156D, “there is good reason to believe Massachusetts courts would enforce them: Massachusetts courts consider articles of incorporation and bylaws to be contracts and Massachusetts courts routinely enforce reasonable contractual choice of forum provisions. Nevertheless, it would be desirable if such corporate bylaw provisions were clearly authorized by Massachusetts statute.”

Chapter 156D

CSC’s Massachusetts Laws Governing Business Entities Annotated is a comprehensive collection of annotated Massachusetts business statutes and an essential resource for business law practitioners in the state and the region.

The 2022 edition is updated with the latest legislation through Act 40 of the 2022 Massachusetts legislative session. In addition, you’ll find over a dozen new case notes from state and federal courts interpreting the law. Also included in this edition are four full-text cases covering recent legal developments regarding voting shares, derivate actions, compelled arbitration, and sale of securities.

Other features include the Massachusetts Business Fee Schedule and 200 Massachusetts forms for incorporation/formation, qualification, mergers, dissolution, and name reservation for all entity types available directly via the LexisNexis Store download center. The forms appendix also provides a listing of the forms and contact information for the Massachusetts Division of Corporations.

Massachusetts Laws Governing Business Entities Annotated is available as a softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library. To learn more about the 2022 Edition of Massachusetts Laws Governing Business Entities Annotated, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.

*Kurt Hemr is a Partner in the Boston offices of Skadden, Arps, Slate, Meagher & Flom LLP whose practice focuses on securities and insurance product litigation, intellectual property litigation, corporate governance disputes, and other forms of complex civil litigation. The views expressed in the Special Commentary are those of the author and not the firm.