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Open Access. Powered by Scholars. Published by Universities.®

2003

University of Pennsylvania Carey Law School

Faculty Scholarship at Penn Law

Corporate governance

Business

Articles 1 - 1 of 1

Full-Text Articles in Law

Corporate Constitutionalism: Antitakeover Charter Provisions As Pre-Commitment, Marcel Kahan, Edward B. Rock Jan 2003

Corporate Constitutionalism: Antitakeover Charter Provisions As Pre-Commitment, Marcel Kahan, Edward B. Rock

Faculty Scholarship at Penn Law

Constitutions constitute a polity and create and entrench power. A corporate constitution - the governance choices incorporated in state law and the certificate of incorporation - resembles a political constitution. Delaware law allows parties to create corporations, to endow them with perpetual life, to assign rights and duties to "citizens" (directors and shareholders), to adopt a great variety of governance structures, and to entrench those choices. In this Article, we argue that the decision to endow directors with significant power over decisions whether and how to sell the company is a constitutional choice of governance structure. We then argue that it is ...