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Full-Text Articles in Law
Law And The Rise Of The Firm , Henry Hansmann, Reiner Kraakman, Richard Squire
Law And The Rise Of The Firm , Henry Hansmann, Reiner Kraakman, Richard Squire
Faculty Scholarship
Organizational law empowers firms to hold assets and enter contracts as entities that are legally distinct from their owners and managers. Legal scholars and economists have commented extensively on one form of this partitioning between firms and owners: namely, the rule of limited liability that insulates firm owners from business debts. But a less-noticed form of legal partitioning, which we call "entity shielding," is both economically and historically more significant than limited liability. While limited liability shields owners' personal assets from a firm's creditors, entity shielding protects firm assets from the owners' personal creditors (and from creditors of other business …
New Business Entities In Evolutionary Perspective, Henry Hansmann, Reiner Kraakman, Richard Squire
New Business Entities In Evolutionary Perspective, Henry Hansmann, Reiner Kraakman, Richard Squire
Faculty Scholarship
The new types of business forms that have developed over the past thirty years all combine the freedom of contracting that is traditional to the partnership with the pattern of creditors' rights that is traditional to the business corporation. Legal scholars differ on the issue of whether these new business forms are more partnership-like or corporation-like. Those taking the partnership-like view argue that the degree of freedom of contract is the essential difference between the traditional corporation and partnership forms, while those adhering to the corporation-like view argue that the pattern of creditors' rights is the essential difference. The authors …
Fiduciary Duty, Contract, And Waiver In Partnerships And Limited Liability Companies, Richard A. Booth Marbury Research Professor Of Law
Fiduciary Duty, Contract, And Waiver In Partnerships And Limited Liability Companies, Richard A. Booth Marbury Research Professor Of Law
Faculty Scholarship
Among the controversies swirling around the promulgations of new uniform statutes governing partnerships and LLCs is the question whether and to what extend fiduciary duties should be made mandatory or waivable. Although courts and commentators have not traditionally focused on the costs of fiduciary duties, the costs are significant in that such duties may preclude agents from engaging in other legitimate ventures. Indeed, fiduciary duty may be used by those to whom it is owed to prevent competition or extort side benefits form participants. Mandatory duties effectively require participants who may identify multiple business opportunities to overinvest their human capital …
The Limited Liability Company And The Search For A Bright Line Between Corporations And Partnerships, Richard A. Booth Marbury Research Professor Of Law
The Limited Liability Company And The Search For A Bright Line Between Corporations And Partnerships, Richard A. Booth Marbury Research Professor Of Law
Faculty Scholarship
Despite the potential loss in tax revenue, the Internal Revenue Service (IRS) is making it easier and easier to avoid corporate taxes. Witness the advent of limited liability companies and the proposed "check-the-box" regulations. This article takes a look at the real distinctions between -- and policy supporting -- pass-through and entity level taxation and draws the conclusion that entity level taxation will probably become limited to publicly traded entities only.
"Magnificent Circularity" And The Churkendoose: Llc Members And Federal Employment Law, Daniel S. Kleinberger
"Magnificent Circularity" And The Churkendoose: Llc Members And Federal Employment Law, Daniel S. Kleinberger
Faculty Scholarship
This article seeks to explain under what circumstances federal employment statutes should apply to LLC members. Part I recounts the advent of LLCs and describes the essential characteristics of LLCs and their members. Part II explores how federal employment case law handles the employee vel non question and explains the problems in using that case law to determine whether LLC members are "employees" for federal employment law purposes. Part Ill attempts to make sense of that case law and proposes a rule for determining when a business owner can provide services to the business without becoming an "employee." Part IV …