Business Organizations Law Commons^™

The Role Of Aspiration In Corporate Fiduciary Duties, Julian Velasco

William & Mary Law Review

Corporate law is characterized by a pervasive divergence between standards of conduct and standards of review. Courts often opine on the relatively demanding standard of conduct, but their judgments must be based on the more forgiving standard of review. Commentators defend this state of affairs by insisting that it provides guidance to directors without imposing ruinous liability. However, the dichotomy can lead many, especially those who focus on the bottom line, to call into question the meaningfulness of standards of conduct. Of particular concern is the increasing popularity, in legal and scholarly circles, of the notion that fiduciary duty standards …

Introduction To M&A Tax: Due Diligence Traps In S Corp Acquisitions (Slides), Robert G. Mcelroy, William M. Richardson

William & Mary Annual Tax Conference

No abstract provided.

Partnership Tax Planning Without Falling Into The Canal (Slides), Andrea M. Whiteway

William & Mary Annual Tax Conference

No abstract provided.

Partnership Tax Planning Without Falling Into The Canal (Outline), Andrea M. Whiteway

William & Mary Annual Tax Conference

No abstract provided.

Business Courts And Interstate Competition, John F. Coyle

William & Mary Law Review

Over the past two decades, specialized trial courts that hear business disputes primarily or exclusively have been established in nineteen states. To explain the recent surge of interest in these courts, policymakers and scholars alike have cited the process of interstate competition. Specifically, these commentators have argued that business courts serve, among other purposes, to attract out-of-state companies to expand their business, reincorporate, or litigate disputes in the jurisdiction that created the business court.

This Article critically evaluates each of these theories. It argues first that business courts do not serve to attract companies from other states because business expansion …

America's Energy Dependency: Will Government Regulation Of Caffeine Bring The Caffeine Companies To A Crash?, Rakesh J. Parikh

William & Mary Business Law Review

In light of Americans’ growing love affair with caffeinated products, this Note considers not only the possibility of future regulation of those products, but also the effect that regulation would have on caffeinated product-producing companies. While there is no certainty that such regulation is in our future, the regulation of market-similar products like tobacco and alcohol, and regulations abroad on heavily caffeinated drinks, suggest American regulation of caffeinated products to be a distinct possibility. This would be a serious concern for caffeine companies, who could face reduced access to target markets as a result of FDA-imposed limitations, whether by age …

How Do Start-Ups Obtain Their Legal Services?, Darian M. Ibrahim

Faculty Publications

This essay presents the first empirical study of how rapid-growth start-up companies obtain their legal services, with particular attention to the choice between in-house and outside counsel. Drawing on responses to online surveys of venture-capital-backed start-ups formed between 2006 and 2008, the study tests several hypotheses rooted in economic and entrepreneurship literature. The results show that most start-ups do not employ in-house counsel, with cost considerations and broader coverage offered by outside firms emerging as the primary reasons. In contrast, start-ups that do hire in-house counsel cite their attorneys’ superior understanding of the business, responsiveness, and ability to monitor internal …

The New Exit In Venture Capital, Darian M. Ibrahim

Faculty Publications

No abstract provided.

Wage Taxes And Compensating S Corporation Officers And Members Of Llcs And Llps, John W. Lee

William & Mary Annual Tax Conference

No abstract provided.

Compensating Employees And Employee Owners, And Avoiding Problems With Payroll Tax And Executive Compensation Audits, Mary B. Hevener

William & Mary Annual Tax Conference

No abstract provided.

A Comparison Of Partnership And S Corporation Exit Transactions, Mark J. Silverman, Aaron P. Nocjar

William & Mary Annual Tax Conference

No abstract provided.

Real Estate Partnership And Llc Divorces, Cameron N. Cosby, Brian J. O'Connor

William & Mary Annual Tax Conference

No abstract provided.

Holman V. Commissioner: A Death Knell For The Tax Value Of Transfer Restrictions In Family Limited Partnerships?, Brent B. Nicholson

William & Mary Business Law Review

This Article examines a recent United States court of appeals case concerning section 2703, Holman v. Commissioner,7 and some earlier cases, including a few under the 1958 regulation, that are relevant to Holman. The purpose of this Article is to explain the current state of the law with respect to buy-sell type agreements and their influence on setting the transfer tax value. The Article begins with a discussion of the relevant Code and Regulations, focusing on section 2703 and its legislative history. The Article then follows with a look at some of the relevant case law and an in-depth look …

Naming, Identity, And Trademark Law, Laura A. Heymann

Faculty Publications

As the process of creation in the age of digital media becomes more fluid, one pervasive theme has been the desire for attribution: from the creator’s perspective, to receive credit for what one does (and to have credit not falsely attributed) and from the audience’s perspective, to understand the source of material with which one engages. But our norms of attribution reflect some inconsistencies in defining the relationship among name, identity, and authenticity. A blog post by a writer identified only by a pseudonym may prove to be very influential in the court of public opinion, while the use of …

At The Intersection Of Corporate Governance And Environmental Sustainability, Jayne W. Barnard

William & Mary Business Law Review

Most boards of public companies have learned to live comfortably with audit committees, nominating committees, and compensation committees. An increasing number of companies are now also creating risk-management committees. This Essay explores the early stages of development of yet another board-level committee: the sustainability committee. The Essay posits several advantages to having a board-level sustainability committee and identifies possible sources of pressure for the creation of more such committees. It also suggests some of the disadvantages of sustainability committees and cautions against cosmetic governance reform. By examining what we know today (and can imagine tomorrow) about sustainability committees, this Essay …

Virginia Is For Lovers And Directors: Important Differences Between Fiduciary Duties In Virginia And Delaware, Laurence V. Parker Jr.

William & Mary Business Law Review

Virginia and Delaware have different approaches to a director’s fiduciary duties. The Virginia Stock Corporation Act imposes a deferential subjective standard of conduct that allows the more-frequent application of its business judgment rule. Virginia courts have followed the Virginia Stock Corporation Act and have shown even more deference to the decisions of directors than the Virginia Stock Corporation Act may require. In addition, Virginia courts have been reluctant to hold that additional constituencies, beyond the corporation and shareholders as a class, are owed fiduciary duties. Finally, Virginia courts have not imposed “enhanced scrutiny” on the decisions of directors involving hostile …

Tax Strategies And Key Tax Issues In Selling A Business, Part 1, L. Michael Gracik Jr.

William & Mary Annual Tax Conference

No abstract provided.

Tax Strategies And Key Tax Issues In Selling A Business, Part 2, Robert G. Mcelroy

William & Mary Annual Tax Conference

No abstract provided.

Estate Planning For The Closely Held Business, Dennis I. Belcher, William I. Sanderson

William & Mary Annual Tax Conference

No abstract provided.

Teaching Old Dogs New Tricks - Emerging Tax Issues For Distressed Real Estate Assets And Partnerships (Slides), Michael G. Frankel, David A. Miller

William & Mary Annual Tax Conference

No abstract provided.

Teaching Old Dogs New Tricks - Emerging Tax Issues For Distressed Real Estate Assets And Partnerships, Michael G. Frankel, David A. Miller

William & Mary Annual Tax Conference

No abstract provided.

Using - And Not Losing - Tax Losses, Part 2 (Slides), Steven M. Friedman

William & Mary Annual Tax Conference

No abstract provided.

Using - And Not Losing - Tax Losses, Part 1: Protecting Tax Losses From A Section 382 Ownership Change (Slides), Mark C. Van Deusen

William & Mary Annual Tax Conference

No abstract provided.

Debt As Venture Capital, Darian M. Ibrahim

Faculty Publications

Venture debt, or loans to rapid-growth start-ups, is a puzzle. How are start-ups with no track records, positive cash flows, tangible collateral, or personal guarantees from entrepreneurs able to attract billions of dollars in loans each year? And why do start-ups take on debt rather than rely exclusively on equity investments from angel investors and venture capitalists (VCs), as well-known capital structure theories from corporate finance would seem to predict in this context? Using hand-collected interview data and theoretical contributions from finance, economics, and law, this Article solves the puzzle of venture debt by revealing that a start-up’s VC backing …

Choice Of Form And Network Externalities, Larry E. Ribstein, Bruce H. Kobayashi

William & Mary Law Review

This Article provides the first detailed empirical analysis of firms' choice of organizational form. It provides important evidence on whether there is an efficient market in organizational forms or firms' choice of form is impeded by network externalities. We focus on formations of limited liability partnerships (LLPs) and limited liability companies (LLCs) in examiningthe effect of various factors on firms' choice of business form. Our data provides important evidence against the network externalities hypothesis. Because the LLP and LLC forms are similar except for the LLPs link to the existing "network" of partnership law, firms would prefer the LLP to …

Financing The Next Silicon Valley, Darian M. Ibrahim

Faculty Publications

Silicon Valley’s success has led other regions to attempt their own high-tech transformations, yet most imitators have failed. Entrepreneurs may be in short supply in these “non-tech” regions, but some non-tech regions are home to high-quality entrepreneurs who relocate to Silicon Valley due to a lack of local financing for their start-ups. Non-tech regions must provide local finance to prevent entrepreneurial relocation and reap spillover benefits for their communities. This Article compares three possible sources of entrepreneurial finance—private venture capital, state-sponsored venture capital, and angel investor groups—and finds that angel groups have distinct advantages when it comes to funding innovation …

Shareholder Democracy And The Curious Turn Towards Board Primacy, Grant Hayden, Matthew T. Bodie

William & Mary Law Review

Corporate law is consumed with a debate over shareholder democracy. The conventional wisdom counsels that shareholders should have more voice in corporate governance, in order to reduce agency costs and provide democratic legitimacy. A second set of theorists, described as “board primacists,” advocates against greater shareholder democracy and in favor of increased board discretion. These theorists argue that shareholders need to delegate their authority in order to provide the board with the proper authority to manage the enterprise and avoid short-term decision making. In the last few years, the classical economic underpinnings of corporate law have been destabilized by a …

Free Enterprise And The Rule Of Law: The Political Economy Of Executive Discretion (Efficiency Implications Of Regulatory Enforcement Strategies), Kevin S. Marshall

William & Mary Business Law Review

Economic theory teaches that if all of the operational conditions of the perfectly competitive model hold, then certain efficiencies may be achieved to the favor of a wealth-seeking society, ceteris paribus (assuming all other things remain equal and/or the absence of all other disturbing influences). This Article observes the asymmetrical enforcement of relevant governing laws, regulations and rules eliminates any possibility that all other influences with respect to the performance values of the perfectly competitive model have been neutralized. Under such regulatory enforcement conditions, there can be no wealth-creation expectations.

Corporate Governance In The Courtroom: An Empirical Analysis, Jessica Erickson

William & Mary Law Review

Conventional wisdom is that shareholder derivative suits are dead. Yet this death knell is decidedly premature. The current conception of shareholder derivative suits is based on an empirical record limited to suits filed in Delaware or on behalf of Delaware corporations, leaving suits outside this sphere in the shadows of corporate law scholarship. This Article aims to fill this gap by presenting the first empirical examination of shareholder derivative suits in the federal courts. Using an original, hand-collected data set, my study reveals that shareholder derivative suits are far from dead. Shareholders file more shareholder derivative suits than securities class …

Bonding Limited Liability, Robert J. Rhee

William & Mary Law Review

Limited liability is considered a “birthright” of corporations. The concept is entrenched in legal theory, and it is a fixed reality of the political economy. But it remains controversial. Scholarly debate has been engaged in absolute terms of defending the rule or advocating its abrogation. Though compelling, these polar positions, often expressed in abstract arguments, are associated with disquieting effects. Without limited liability, efficiency may be severely compromised. With it, involuntary tort creditors bear some of the cost of an enterprise. Most other proposals for reforming limited liability have been incremental, such as modifying veil-piercing. However, neither absolutism nor marginalism …