Close Corporations and the Kansas General Corporation Code of 1972

It has become a truism that within the genus of corporation there are at least two species -- the publicly-held corporation and the closely-held corporation -- and that the characteristics and requirements of a close corporation often are more akin to those of a partnership than to those of a public corporation. It is also common knowledge that in the past corporate legislation was drafted solely with the public corporation in mind and thus failed to take account of the peculiar characteristics and needs of the close corporation. As a result, the close corporation became a square peg sought to be forced into a round hold. A free and independent board of directors, necessary for the protection of inactive investors in a public corporation, was an anathema to the close corporation in which all of the stakeholders were engaged in active conduct of the business.