Faught Hopes Book Helps Stimulate New Businesses

Article excerpt

The author of a book to help lawyers decipher two Oklahoma corporation laws passed in the 1980s says he hopes it will stimulate more incorporations of new businesses and foreign-based businesses in the state.

"Oklahoma Business Organizations: Formation and Representation" was designed as an attorney source book on provisions of the Oklahoma Revised Uniform Limited Partnership Act, passed in 1984, and the Oklahoma General Corporations Act, passed in 1986, said Irving L. Faught, the book's author and an attorney with the Oklahoma City firm of Andrews Davis Legg Bixler Milsten & Price.

"Those were two significant pieces of legislation in the latter half of the 1980s that affect the regulation of business organizations - corporations and partnerships - in the state of Oklahoma that are substantially different from what the law was before," he said.

"There was no comprehensive book on the statutes. . .and it ("Oklahoma Business Organizations") was published because of the lack of comparable material in a single source and the newness of the acts," Faught said.

The book was published in late July by Aspen Publishers Inc. in Gaithersburg, Md., as part of an Oklahoma series including titles on corporate forms, real estate forms, estate planning, will drafting and estate administration forms, and civil procedure forms.

The more than 400-page hard-back book is in a looseleaf, tabular format, and Faught said it would be updated annually.

It sells for $99.

"If we save the lawyer one hour of time, he's paid for the book," he said.

The Oklahoma General Corporations Act replaced the section of state law on corporations with provisions based on the Delaware general corporation law, said Faught, 50, who has practiced business and corporate law for more than 20 years.

"Historically, when Oklahoma became a state, there was a great suspicion about corporations and big business," he said. "Our laws were populist sort of laws, and protective laws for the state against corporations."

Faught said Oklahoma had basically an agriculture and energy-related economy, and pioneers feared the corporations in the East, particularly the railroads.

Gradually, many states, especially industrial states, made their business laws more flexible. But not Oklahoma.

"Oklahoma didn't keep pace," Faught said. "We didn't have a modern corporate law until 1947."

For such major activities as mergers, acquisitions, takeovers and business combinations, Oklahoma law was not changed again until 1979, he said.

"Then the bleak economic conditions of the early 1980s, I think, brought about these two pieces of legislation with the hope of spurring economic development for Oklahoma," Faught said.

Oklahoma Attorney General Robert Henry, who in 1985 was a state representative from Shawnee, authored the corporation act and wrote a preface to the book.

Henry said Oklahoma's antiquated corporation laws caused the state to lag dangerously behind other states in economic development policy.

"Oklahoma's corporate environment was staid and stultifying - unable to meet modern demands," he wrote. "Indeed, to the best of my knowledge, all of the state's Fortune 500 companies were incorporated in other states, usually Delaware, where the laws gave corporations much greater flexibility. …