Describe the three types of state statutes representing the modern regulation of close corporations.
What will be an ideal response?
Today, most states have enacted corporation laws that recognize the close corporation and the special problems associated with it. These statutes may be classified into three types:
1. A special section or chapter in the general incorporation statute that deals exclusively with close corporations.
2. Scattered provisions throughout the general corporation act that permit close corporations to voluntarily adopt less rigid organizational and operational arrangements.
3. Statues that do not specifically mention close corporations but permit corporations to adopt in their articles or bylaws provisions that are particularly attractive to close corporations. In general, all three types of statutes give legal recognition to some or all of the devices developed by lawyers to ensure private ownership and to protect minority shareholders.
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