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Full-Text Articles in Law
Fighting Foreign-Corporate Political Access: Applying Corporate Veil-Piercing Doctrine To Domestic-Subsidiary Contributions, Ryan Rott
Michigan Law Review
Campaign finance regulations limit speech. The laws preclude foreign nationals, including foreign corporations, from participating in U.S. politics via campaign contributions. The unusual characteristics of corporations, however, may allow foreign corporations to exploit a loophole in the regulatory regime. A foreign corporation may contribute to political campaigns by acquiring a domestic subsidiary and dominating it. This Note addresses how these unusual corporate behaviors enable foreign corporations to illegally corrupt the political process. This Note concludes that to close the loophole without violating the free speech rights of domestic subsidiaries, Congress should enact legislation which would apply corporate veil-piercing theory to …
Legal Entities As Transferable Bundles Of Contracts, Kenneth Ayotte, Henry Hansmann
Legal Entities As Transferable Bundles Of Contracts, Kenneth Ayotte, Henry Hansmann
Michigan Law Review
The large, modern business corporation is frequently organized as a complex cluster of hundreds of corporate subsidiaries under the common control of a single corporate parent. Our Article provides new theory and supportive evidence to help explain this structure. We focus, in particular on the advantages of subsidiary entities in providing the option to transfer some or all of the firm's contractual rights and obligations in the future. The theory not only sheds light on corporate subsidiaries but also illuminates a basic function of all types of legal entities, from partnerships to nonprofit corporations. We show that when, as is …
Corporations - Corporate Seal - When Affixing Seal Makes The Instrument A Specialty, Edward D. Ransom
Corporations - Corporate Seal - When Affixing Seal Makes The Instrument A Specialty, Edward D. Ransom
Michigan Law Review
The plaintiff contracted to buy gasoline from a subsidiary of the defendant. The lengthy contract was signed at the end by the proper officers and in juxtaposition to the signatures were the corporate seals of both parties. The contract contained a recital of sealing. On a separate page, but attached to the contract, was a guaranty by the defendant of the subsidiary's performance. This also was sealed with the corporate seals of both parties adjacent to the signatures of the officers. No mention of sealing was contained in the guaranty. On default by the subsidiary, the plaintiff sued on the …
Corporations - Parent's Liability For Subsidiary's Obligations, Michigan Law Review
Corporations - Parent's Liability For Subsidiary's Obligations, Michigan Law Review
Michigan Law Review
A parent corporation owned all the stock of a subsidiary which it had organized to hold real estate, its own business being mercantile. The directors and officers of both corporations were identical. The subsidiary sublet premises for ninety-nine years, in turn leasing them to the parent for ten years. Improvements were made in accordance with the subsidiary's contract, and "leasehold trust certificates" were issued by an assignee of the underlying lease. The parent quit the premises before the expiration of its lease, but paid the rent for the whole period. The subsidiary then defaulted on the ninety-nine year lease, having …
Corporations - Common Board - Fraud - Ratification By Majority Stockholders, Theodore R. Vogt
Corporations - Common Board - Fraud - Ratification By Majority Stockholders, Theodore R. Vogt
Michigan Law Review
Defendants were directors and officers of a managing corporation and its subsidiary. Both corporations paid defendants salaries, those from the managing corporation approximating the fees paid to it by the subsidiary for management services which were rendered by defendants. Held, payment of management fees by the subsidiary under such circumstances is fraudulent and recoverable from defendants, in a derivative suit by minority stockholders, despite a resolution of the majority stockholders of the subsidiary ratifying the payment. Eshleman v. Keenan, (Del. Ch. 1936) 187 A. 25.
Corporations-Subsidiary's Evasion Of Income Tax Law By Contract With Parent Company-Income Attributable To Business Transacted Within The State
Michigan Law Review
The Palmolive company sought to reduce to a minimum the amount of its income taxable in Wisconsin. Three companies were formed which, for convenience' sake, will be designated as: parent company, a Delaware corporation; plaintiff company, a Delaware corporation; and Wisconsin company, a Wisconsin corporation. The parent company acquired all the capital stock of the Wisconsin company, and then acquired all its assets outside the state of Wisconsin, surrendering therefor part of the stock of the Wisconsin company so acquired. The balance of the capital stock of the Wisconsin company the parent company transferred to plaintiff company in exchange for …
Corporations-Power To Delegate Management For Long Period
Corporations-Power To Delegate Management For Long Period
Michigan Law Review
The corporate parties contracted that in consideration of certain commissions to be paid to the plaintiff, the defendant insurance company should delegate to the plaintiff corporation complete and exclusive control and management of its entire business for a period of twenty years. In an action to recover commissions, held, that the contract was void on the ground of public policy, and that there could be no recovery. Sherman & Ellis, Inc., v. Indiana Mutual Casualty Company (C. C. A. 7th Cir.) 41 F.(2d) 588.