Vanderbilt Law Review

First Page



This paper looks into the usefulness of optional (or as they are sometimes called, "permissive" or "special") charter provisions' in molding the corporate form of business organization to meet the diverse needs of particular business situations. It first examines statutory materials and judicial decisions bearing on the validity and effect of optional provisions. It then considers optional clauses in current use and typical legal and business problems that optional clauses may help to solve. It shows that optional clauses often can be used to clarify the rights and other relations of participants in an enterprise, to avoid disadvantageous corporate "norms," or to eliminate normal corporate attributes undesired in a particular enterprise. Finally, it discusses measures that increase the effectiveness of optional clauses and protect them against circumvention.