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Full-Text Articles in Law

The Diminishing Duty Of Loyalty, Julian Velasco Sep 2018

The Diminishing Duty Of Loyalty, Julian Velasco

Journal Articles

Fiduciary duties comprise an integral part of corporate law. It is generally understood that directors owe the corporation and its shareholders two fiduciary duties: the duty of care and the duty of loyalty. Although both duties are firmly established in corporate law, they are not treated equally. It is generally understood that the duty of loyalty is enforced far more rigorously than the duty of care. The justification for this dichotomy is twofold. First, differential treatment is appropriate because of the relative urgencies of the underlying subject matter: loyalty issues pose greater risks than do care issues. Second, the deference ...


The Big Crowd And The Small Enterprise: Intracorporate Disputes In The Close-But-Crowdfunded Firm, Martin Edwards Jan 2018

The Big Crowd And The Small Enterprise: Intracorporate Disputes In The Close-But-Crowdfunded Firm, Martin Edwards

Journal Articles

Equity crowdfunding is a financial innovation that allows small businesses and startups to access capital through soliciting investment over the Internet. The current literature on crowdfunding has focused on its theoretical background and on the development of crowdfunding exemptions from the securities laws permitting the practice. There is less discussion of the impact of crowdfunding on corporate governance. This article fills that gap by outlining the potential for a panoply of intracorporate disputes between and among majority shareholders and “crowd” minority shareholders, placing the discussion within the longstanding—if uneasy—divide in judicial treatment of disputes in public corporations and ...