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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 …