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Full-Text Articles in Law

Anonymous Companies, William J. Moon Jan 2022

Anonymous Companies, William J. Moon

Faculty Scholarship

Hardly a day goes by without hearing about nefarious activities facilitated by anonymous “shell” companies. Often described as menaces to the financial system, the creation of business entities with no real operations in sun-drenched offshore jurisdictions offering “zero percent” tax rates remains in vogue among business titans, pop stars, multimillionaires, and royals. The trending headlines and academic accounts, however, have paid insufficient attention to the legal uses of anonymous companies that are both ubiquitous and almost infinite in their variations.

This Article identifies privacy as a functional feature of modern business entities by documenting the hidden virtues of anonymous companies—business …


Delaware's New Competition, William J. Moon Jan 2020

Delaware's New Competition, William J. Moon

Faculty Scholarship

According to the standard account in American corporate law, states compete to supply corporate law to American corporations, with Delaware dominating the market. This “competition” metaphor in turn informs some of the most important policy debates in American corporate law.

This Article complicates the standard account, introducing foreign nations as emerging lawmakers that compete with American states in the increasingly globalized market for corporate law. In recent decades, entrepreneurial foreign nations in offshore islands have used permissive corporate governance rules and specialized business courts to attract publicly traded American corporations. Aided in part by a select group of private sector …


Regulating Offshore Finance, William J. Moon Jan 2019

Regulating Offshore Finance, William J. Moon

Faculty Scholarship

From the Panama Papers to the Paradise Papers, massive document leaks in recent years have exposed trillions of dollars hidden in small offshore jurisdictions. Attracting foreign capital with low tax rates and environments of secrecy, a growing number of offshore jurisdictions have emerged as major financial havens hosting thousands of hedge funds, trusts, banks, and insurance companies.

While the prevailing account has examined offshore financial havens as “tax havens” that facilitate the evasion or avoidance of domestic tax, this Article uncovers how offshore jurisdictions enable corporations to evade domestic regulatory law. Specifically, recent U.S. Supreme Court cases restricting the geographic …


Economic Democracy And Enterprise Form In Finance, William H. Simon Jan 2019

Economic Democracy And Enterprise Form In Finance, William H. Simon

Faculty Scholarship

This article considers the relative advantages of alternative enterprise forms in finance from the point of view of public accountability. The business corporation is compared to the state agency or authority, the cooperative, the state corporation, and the charitable nonprofit. These forms can be distinguished according to whether they aspire to enhance general electoral democracy or stakeholder democracy and whether their democratic controls operate directly or indirectly. The article suggests that the indirect democratic forms may be more promising than the direct ones. It also argues that the project of democratizing finance depends on the development of practices of multifactor …


Incorporating Legal Claims, Maya Steinitz Feb 2015

Incorporating Legal Claims, Maya Steinitz

Faculty Scholarship

Recent years have seen an explosion of interest in commercial litigation funding. Whereas the judicial, legislative, and scholarly treatment of litigation finance has regarded litigation finance first and foremost as a form of champerty and sought to regulate it through rules of legal professional responsibility (hereinafter, the "legal ethics paradigm"), this Article suggests that the problems created by litigation finance are all facets of the classic problems created by "the separation of ownership and control" that have been a focus of business law since the advent of the corporate form. Therefore, an "incorporation paradigm," offered here, is more appropriate. "Incorporating …


Foreword: Shape Shifting In The Law, Daniel S. Kleinberger Jan 2012

Foreword: Shape Shifting In The Law, Daniel S. Kleinberger

Faculty Scholarship

As this issue of the William Mitchell Law Review reflects, a significant dislocation is occurring in the law of business organizations. Something far more fundamental than a legal definition or any similarly specific concept is in flux. The legal and philosophical question is not whether a business organization should be able to engage instrumentally in non-profit activities but rather whether a business organization's purpose may include something in addition to (and likely prejudicial to) the purely pecuniary interests of the organization's owners.


Two Decades Of "Alternative Entities": From Tax Rationalization Through Alphabet Soup To Contract As Deity, Daniel S. Kleinberger Jan 2009

Two Decades Of "Alternative Entities": From Tax Rationalization Through Alphabet Soup To Contract As Deity, Daniel S. Kleinberger

Faculty Scholarship

This essay: (i) puts into perspective the past 20 years of developments in the U.S. law of limited liability companies (LLCs), limited liability partnerships (LLPs), and limited liability limited partnerships (LLLPs); (ii) explains how a movement toward tax rationalization has been transformed into a palace coup aimed at fiduciary duty (a fundamental tenet of the U.S. law of closely held businesses); and (iii) criticizes both conceptually and pragmatically efforts to "kill Cardozo" and worship "freedom of contract."


The Llc As Recombinant Entity: Revisiting Fundamental Questions Through The Llc Lens, Daniel S. Kleinberger Jan 2009

The Llc As Recombinant Entity: Revisiting Fundamental Questions Through The Llc Lens, Daniel S. Kleinberger

Faculty Scholarship

Rather than being a simple hybrid, the U.S. limited liability company is better described as a recombinant entity that combines attributes of four different types of business organizations. The LLC offers an almost ineffably flexible structure, but that flexibility does not place the LLC beyond the range of traditional, formalist analysis. To the contrary, parsing the LLC in pursuit of conventional forms may allow us "to know the place for the first time." This essay uses conventional concepts to: (i) explore whether "labels matter" when LLC membership interests are described as Contract or as Property; and (ii) examine how the …


Sorting Through The Soup: How Do Llcs, Llps And Lllps Fit Withing The Regulations And Legal Doctrines?, Daniel S. Kleinberger Jan 2003

Sorting Through The Soup: How Do Llcs, Llps And Lllps Fit Withing The Regulations And Legal Doctrines?, Daniel S. Kleinberger

Faculty Scholarship

In a children' book published in 1946, Ben Ross Berenberg described an imaginary amalgam called the churkendoose - "part chicken, turkey, duck and goose." In 1977, Wyoming invented a business law churkendoose: the limited liability company - part corporation, part general partnership, part limited partnership. That churkendoose has revolutionized the law of business organizations, becoming the vehicle of choice for tens of thousands of ventures every month and causing the IRS to radically overhaul its approach to taxing business entities. This article explores how preexisting regulatory and common law apply to LLCs and the related organizations known as limited liability …


Form And Function In Business Organizations, Richard A. Booth Marbury Research Professor Of Law Jan 2002

Form And Function In Business Organizations, Richard A. Booth Marbury Research Professor Of Law

Faculty Scholarship

In this piece, I argue that the recent proliferation of forms of business organizations in addition to the traditional partnership and corporation may have arisen from the implicit recognition that various organizations may serve needs of business people in different types of businesses, and that traditional theory of the firm explanations are too narrowly focused on market failure explanations for firm formation. I identify at least five different factors that may motivate people to form a business organization and discuss how these different factors may militate in favor of one business form rather than another. I conclude that the collections …