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A Legal Theory Of Shareholder Primacy, Robert J. Rhee
A Legal Theory Of Shareholder Primacy, Robert J. Rhee
Working Papers
Shareholder primacy is the most fundamental concept in corporate law and corporate governance. It is widely embraced in the business, legal, and academic communities. Economic analysis and policy arguments advance a normative theory that corporate managers should maximize shareholder wealth. Academic literature invariably describes shareholder primacy as a “norm.” But whether the concept is “law” is contested because, remarkably, we still do not have a coherent legal theory. Our understanding of a fundamental tenet of the field is flawed and incomplete. This article presents a positive legal theory of shareholder primacy. It answers the questions: Is shareholder primacy law? What …
How Do Llc Owners Contract Around Default Statutory Protections?, Peter Molk
How Do Llc Owners Contract Around Default Statutory Protections?, Peter Molk
UF Law Faculty Publications
Limited liability companies are built on the idea of contractual freedom. Unlike other business organization forms, most owner protections apply only by default to LLCs, which are free to waive or modify them as desired. This freedom promises economic efficiency if parties are sophisticated but raises the potential for opportunism by relatively more sophisticated managers and majority owners. While companies ranging from small landscape firms to Chrysler and Fidelity organize as LLCs, remarkably little is known about whether or how LLCs use this contractual flexibility. I analyze the operating agreements of 283 privately owned LLCs organized under Delaware and New …