Law Commons^™

All In The Family As A Single Shareholder Of An S Corporation, Douglas A. Kahn, Jeffrey H. Kahn, Terrence G. Perris

Articles

Subject to a few exceptions, a corporation that has elected to be taxed under subchapter S of chapter 1 of subtitle A of title 26 of the United States tax code is not taxed on its net income. Instead, the income, deductions, credits, and other tax items of an S corporation pass through to its shareholders on a pro rata basis. To qualify for subchapter S treatment, an electing corporation must satisfy the requirements that are set forth in section 1361, one of which is that the corporation can have no more than 100 shareholders. One aspect of that requirement …

The Economic Impact Of Backdating Of Executive Stock Options, M. P. Narayanan, Cindi A. Schipani, H. Nejat Seyhun

Michigan Law Review

This Article discusses the economic impact of legal, tax, disclosure, and incentive issues arising from the revelation of dating games with regard to executive option grant dates. It provides an estimate of the value loss incurred by shareholders of firms implicated in backdating and compares it to the potential gain that executives might have obtained through backdating. Using a sample of firms that have already been implicated in backdating, we find that the revelation of backdating results in an average loss to shareholders of about 7%. This translates to about $400 million per firm. By contrast, we estimate that the …

Il Diritto Dell'azionista All'informazione: Profili Processuali Nel Diritto Tedesco, Valerio Sangiovanni

Valerio Sangiovanni

No abstract provided.

Director Compliance With Elusive Fiduciary Duties In A Climate Of Corporate Governance Reform, Nadelle Grossman

Fordham Journal of Corporate & Financial Law

No abstract provided.

The Yukos Money Laundering Case: A Never-Ending Story, Dmitry Gololobov

Michigan Journal of International Law

The Yukos case has unveiled the possible dangers of money laundering legislation in the hands of governments with transitional economies and weak democratic traditions. Even if the anti-money laundering laws of the country comply with international pronouncements to the letter, there are still a number of ways the laws could be used for the sole purpose of persecuting political opponents. In the Yukos case, the money laundering charges were interrelated with the charges of corporate tax evasion, which, taken separately, in Russia, represent a rather weak tool for suppressing the political opponents, but taken together they are perfect for the …

Criminalization Of Corporate Law: The Impact On Shareholders And Other Constituents, David K. Millon

Scholarly Articles

None available.

Dividend Policy Inside The Multinational Firm, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr.

Articles

This paper examines the determinants of profit repatriation policies for US multinational firms. Dividend repatriations are surprisingly persistent and resemble dividend payments to external shareholders. Tax considerations influence dividend repatriations, but not decisively, as differentially-taxed entities feature similar policies and some firms incur avoidable tax penalties. Parent companies requiring cash to fund domestic investments, or to pay dividends to common shareholders, draw on the resources of their foreign affiliates through repatriations. Incompletely controlled affiliates are more likely than others to make regular dividend payments and to trigger avoidable tax costs through repatriations. The results indicate that traditional corporate finance concerns …

Toward Common Sense And Common Ground? Reflections On The Shared Interests Of Managers And Labor In A More Rational System Of Corporate Governance, Leo E. Strine Jr.

All Faculty Scholarship

In this essay, Vice Chancellor Strine reflects on the common interests of those who manage and those who labor for American corporations. The first part of the essay examines aspects of the current corporate governance and economic environment that are putting management and labor under pressure. The concluding section of the essay identifies possible corporate governance initiatives that might — by better focusing stockholder activism in particular and corporate governance more generally on long-term, rather than short-term, corporate performance — generate a more rational system of accountability, that focuses on the durable creation by corporations of wealth through fundamentally sound, …

Why Was The U.S. Corporate Tax Enacted In 1909?, Reuven S. Avi-Yonah

Book Chapters

This chapter argues that the principal reason the US adopted the corporate tax in 1909 was to regulate corporate managerial power, and that in this regard the 1909 tax differed both from the 1894 corporate tax and from current conceptions of the tax as an indirect tax on corporation’s shareholders.

The United States has had a corporate income tax since 1909. Currently, this tax is under significant criticism, with several academics and practitioners calling for its abolition. It therefore seems appropriate in this context to try to determine what led to the enactment of this tax, and whether the original …

Rationalizing The Taxation Of Reorganizations And Other Corporate Acquisitions, Herwig J. Schlunk

Vanderbilt Law School Faculty Publications

This article examines the taxation of human shareholders in the case of mergers and acquisitions. Currently, the relevant law is extraordinarily complex, utterly inconsistent, and in many instances arguably unfair. There are really only two plausible ways to cure these ills. The first would involve moving to a tax system with more fulsome gain recognition, most likely in the form of mark-to-market taxation. This option is not in my opinion feasible (either technically or what is perhaps more important, politically). Accordingly, the second potential cure, moving to a tax system with less gain recognition, merits attention. In this article, I …

Insider Trading Rules Can Affect Attractiveness Of Country's Stock Markets, Laura Nyantung Beny

Articles

The academic debate about the desirability of prohibiting insider trading is longstanding and as yet unresolved. Until Henry Manne’s 1966 book, Insider Trading and the Stock Market, the debate centered on whether insider trading is unfair to public investors who are not privy to private corporate information. However, the fairness approach is malleable and indeterminate and thus does not lend itself to clear-cut policy prescriptions. Since Manne’s book, the focus of the debate has been on the effect of insider trading on economic efficiency. Manne argued that, contrary to the prevailing legal and moral opinion of the time, insider trading …

Insider Trading Laws And Stock Markets Around The World: An Empirical Contribution To The Theoretical Law And Economics Debate, Laura Nyantung Beny

Articles

The primary goal of this Article is to bring empirical evidence to bear on the heretofore largely theoretical law and economics debate about insider trading. The Article first summarizes various agency, market, and contractual (or "Coasian") theories of insider trading propounded over the course of this longstanding debate. The Article then proposes three testable hypotheses regarding the relationship between insider trading laws and several measures of stock market performance. Exploiting the natural variation of international data, the Article finds that more stringent insider trading laws are generally associated with more dispersed equity ownership, greater stock price accuracy and greater stock …