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Effective June 1st, 2020: The New Montana Business Corporation Act

By: Pia Angelikis, Esq., COGENCY GLOBAL on Thu, May 21, 2020

New BCA Effective June 1 2020 in MontanaMarking the first major revision to its corporation law in 28 years, Montana has a new Business Corporation Act taking effect June 1st, 2020.

The new act brings Montana’s business corporation law into closer alignment with the 2016 version of the ABA’s revised Model Business Corporation Act. (Montana has been considered a model state since adopting the original version of the MBCA in 1968.)

Let’s look at some highlights of these important changes.

Domestication and Conversion

Under the new Business Corporation Act, a Montana domestic corporation can change its state of incorporation to a foreign state, or a foreign corporation can change its state of incorporation to Montana, provided that the foreign state’s laws permit the change. There were no provisions for corporate domestication or conversion in previous versions of Montana’s code.

The new act also allows certain unincorporated entities, including limited liability companies, to convert to corporations and vice versa.

Ratification of Defective Corporate Actions

The new Montana Business Corporation Act features a procedure for ratifying certain defective corporate actions, whereas existing law did not.

Election of Directors

Montana’s new Business Corporation Act changes the default for electing directors from cumulative voting to non-cumulative voting. Thus, under the new act, shareholders have only one vote per share for each director and cannot multiply their votes by the number of directors to be elected in order to use those votes cumulatively for one or more director candidates. As a default provision, this can be modified to some extent in the Articles of Incorporation.

New Default Voting Percentages

For the following corporate activities, the default shareholder voting percentage has changed from two-thirds to a majority under the new act:

  • Mergers and Shares Exchanges
  • Asset Disposition
  • Dissolution

The default voting percentage for these actions can be modified to some extent in the Articles of Incorporation.

The above touches on some of the key changes to Montana’s business corporation law. Please refer to the full bill text for additional details.


Continue Reading:

Like Montana, Florida recently updated their Business Corporation Act to align with the ABA’s revised Model Business Corporations Act. Catch up on what’s new for Florida corporations.


This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Company Formation and Filing Considerations