Business Organizations Law Commons^™

Lessons From Germany: Improving On The U.S. Model For Corporate Governance, Tien Glaub

Brigham Young University International Law & Management Review

No abstract provided.

Vat Derogations In Germany, Austria, Denmark, And Estonia: Use And Enjoyment Rules, Richard Thompson Ainsworth

Faculty Scholarship

When the Czech Republic elected (effective January 1, 2009) to derogate from the standard rules for determining the place of supply for intangible services, pursuant to Article 58 of the Recast VAT Directive (RVD), it was following the lead of ten other Member States. This paper considers four of those other jurisdictions - Germany, Austria, Estonia, and Denmark - and compares their derogations with that of the Czech Republic.

In each instance a use and enjoyment standard determines the place of supply for certain intangible services. The affected transactions are (potentially) wide ranging. In each instance non-EU countries are on …

Guests At The Table?: Independent Directors In Family-Influenced Public Companies, Deborah A. Demott

Faculty Scholarship

No abstract provided.

National Security Review Of Foreign Mergers And Acquisitions Of Domestic Companies In China And The United States, Kenneth Y. Hui

Cornell Law School Inter-University Graduate Student Conference Papers

China’s recently enacted Anti-Monopoly Law has received much academic attention. In particular, many articles and comments have been written about Article 31 of the Anti-Monopoly Law, a provision on national security review of foreign mergers and acquisitions of domestic companies. The provision has often been labelled as draconian and protectionist. This paper argues that Article 31 is not necessarily so. Article 31 is actually, to a large extent, in line with the national security provisions found in liberal economies. By taking a comparative approach, this paper will demonstrate the similarities between the national security laws in China and the United …

Behind Close Doors: Governance Issues In Private Equity Driven Industries – The Close Corporation Paradox And Its Impact On Private Equity In The Us And Sweden, Kristian Hermanrud

Cornell Law School Inter-University Graduate Student Conference Papers

Publicly traded companies make up only a small fraction of the vast number of corporations operating in the US today. Only about 10,000 companies are traded publicly while there are roughly 20 million corporations doing business in the US. Likewise, over 245 private corporations’ annual revenues exceed $1 billion. Among these, more than twelve employ more than 50,000 employees. Despite the influence on vast amounts of people and capital legislature has, to a large degree, focused on publicly traded companies. The reasons for this stem, in large, back to the years of the market crash in the early thirties and …

The Economics Of Deal Risk: Allocating Risk Through Mac Clauses In Business Combination Agreements, Robert T. Miller

Working Paper Series

In any large corporate acquisition, there is a delay between the time the parties enter into a merger agreement (the signing) and the time the merger is effected and the purchase price paid (the closing). During this period, the business of one of the parties may deteriorate. When this happens to a target company in a cash deal, or to either party in a stock-for-stock deal, the counterparty may no longer want to consummate the transaction. The primary contractual protection parties have in such situations is the merger agreement’s “material adverse change” (MAC) clause. Such clauses are heavily negotiated and …

Changing The Paradigm Of Stock Ownership From Concentrated Towards Dispersed Ownership? Evidence From Brazil And Consequences For Emerging Countries, Érica Gorga

Cornell Law Faculty Publications

This paper analyzes micro-level dynamics of changes in ownership structures. It investigates a unique event: changes in ownership patterns currently taking place in Brazil. It builds upon empirical evidence to advance the theoretical understanding of how and why concentrated ownership structures can change towards dispersed ownership.

Commentators argue that the Brazilian capital markets are finally taking off.

The number of listed companies and Initial Public Offerings (IPOs) in the São Paulo Stock Exchange (Bovespa) has greatly increased. Firms are migrating to Bovespa's special listing segments, which require higher standards of corporate governance. Companies have sold control in the market, and …

The Evolution Of Debt: Covenants, The Credit Market, And Corporate Governance, Charles K. Whitehead

Cornell Law Faculty Publications

No abstract provided.

Integrating Subchapters K And S — Just Do It, Walter D. Schwidetzky

All Faculty Scholarship

The Code contains two “pass-through” tax regimes for business entities. One is contained in Subchapter K, which applies to partnerships, the other in Subchapter S, which, unsurprisingly, applies to S corporations. In the main, both Subchapters tax the owners of the entities rather than the entities themselves. Having two pass-through tax regimes creates obvious administrative and other inefficiencies. There was a time when S corporations served a valuable purpose, particularly when taxpayers needed a fairly simple and foolproof pass-through entity that provided a liability shield. But limited liability companies (LLCs), which are usually taxed as partnerships, 1 in most contexts …

Has Corporate Law Failed? Addressing Proposals For Reform, Antony Page

Michigan Law Review

Part I of this Review discusses the modem "nexus of contracts" approach to corporations and highlights how Greenfield's views differ. Part II examines corporate goals and purposes, suggesting that Greenfield overstates the impact of the shareholder-primacy norm and does not offer a preferable alternative. Part III critiques the means to the ends--Greenfield's proposals for changing the mechanics of corporate governance. Although several of his proposals are intriguing, they seem unlikely to achieve their pro-social aims. This Review remains skeptical, in part because-even given its problems-the U.S. "director-centric governance structure has created the most successful economy the world has ever seen." …

The (Misunderstood) Genius Of American Corporate Law, Robert B. Ahdieh

Faculty Scholarship

In this Reply, I respond to comments by Bill Bratton, Larry Cunningham, and Todd Henderson on my recent paper - Trapped in a Metaphor: The Limited Implications of Federalism for Corporate Governance. I begin by reiterating my basic thesis - that state competition should be understood to have little consequence for corporate governance, if (as charter competition's advocates assume) capital-market-driven managerial competition is also at work. I then consider some of the thoughtful critiques of this claim, before suggesting ways in which the comments highlight just the kind of comparative institutional analysis my paper counsels. Rather than a stark choice …

Changes To The Czech Republic's Vat Act: The Use And Enjoyment Rules, Richard Thompson Ainsworth

Faculty Scholarship

On January 1, 2009 a minor change in the Czech Republic VAT became effective. A use and enjoyment standard was added to modify the sourcing of certain service transactions. Traditional proxy-based rules, derived from Articles 43 and 56(1) of the Recast VAT Directive (RVD), are set aside by this modification when the customer receiving the services has a permanent establishment (PE) in the Czech Republic. The modification is authorized by RVD 58.

This change is a limited adoption of RVD 58(b), and functions like a full force of attraction principle in direct taxation. If caught by these rules, transactions that …

Law Upside Down: A Critical Essay On Stoneridge Investment Partners, Llc V. Scientific-Atlanta, Inc., Franklin A. Gevurtz

NULR Online

No abstract provided.

The Efficiency Of Friendliness: Japanese Corporate Governance Succeeds Again Without Hostile Takeovers, Dan W. Puchniak

Research Collection Yong Pung How School Of Law

It is widely assumed that hostile takeovers are a prerequisite for an efficient system of corporate governance. This assumption is false. Since the new millennium, Japan has transformed itself from being on the brink of one of the largest economic meltdowns in modern economic history to currently being in the midst of its longest period of postwar economic expansion (2002-2007). This astounding recovery was achieved without a single successful hostile takeover of a major Japanese company. True to its postwar tradition, corporate Japan has successfully restructured through government intervention, bank-driven reallocation of capital, and orchestrated and friendly mergers — the …

The Corporate Lawyer's Role In A Contemporary Democracy, Colin P. Marks, Nancy B. Rapoport

Faculty Works

In this paper, we review the traditional arguments for corporate social responsibility and ask the question of what corporate lawyers should do to help their clients do the right thing ethically. We also set out a test - the technically test -- that highlights when something is usually on the wrong side of the ethical line. (If you have to give legal advice starting with Well, technically..., you're on the wrong side of the line.)

A Team Production Approach To Corporate Law And Board Composition, Bernard S. Sharfman, Steven J. Toll

NULR Online

No abstract provided.

Quebec's Module D'Enregistrement Des Ventes (Mev): Fighting The Zapper, Phantomware And Tax Fraud With Technology, Richard Thompson Ainsworth

Faculty Scholarship

On January 28, 2008 the Quebec Minister of Revenue, Jean-Marc Fournier, announced that by late 2009 the MRQ will begin testing a device, the module d'enregistrement des ventes (MEV) that is projected to substantially reduce tax fraud in the restaurant sector. By 2010 or 2011 MEVs will be mandatory in all Quebec restaurants, where they will assure accuracy and retention of business records within electronic cash registers (ECRs).

This paper moves beyond a discussion of the variety of sales suppression programs in use - zappers and phantom-ware. The concern here is on enforcement efforts, particularly the MEV. The intent is …

Trapped In A Metaphor: The Limited Implications Of Federalism For Corporate Governance, Robert B. Ahdieh

Faculty Scholarship

Trapped in a metaphor articulated at the founding of modern corporate law, the study of corporate governance has - for some thirty years - been asking the wrong questions. Rather than a singular race among states, whether to the bottom or the top, the synthesis of William Cary and Ralph Winter’s famous exchange is better understood as two competitions, each serving distinct normative ends. Managerial competition advances the project that has motivated corporate law since Adolf Berle and Gardiner Means - effective regulation of the separation of ownership and control. State competition, by contrast, does not promote a race to …

California Biometrics: A Second Proposal For California's Commission On The 21st Century Economy, Richard Thompson Ainsworth

Faculty Scholarship

This proposal takes a long view to revenue reform. It seeks to fundamentally align the sales tax with the digital foundation of the 21st Century economy.

The core policy question is whether California is willing to change the way it defines sales tax exemptions; is it willing to move from product-centric to person-centric exemptions. Certified tax determination systems can be relied upon. A key element in this proposal is the encryption of exemption certificates in IDs (smart cards with biometric identifiers that will allow the poor or handicapped to make certain purchases tax free).

This proposal suggests that (for example) …

California Zappers: A Proposal For The Commission For The 21st Century Economy, Richard Thompson Ainsworth

Faculty Scholarship

California has not uncovered a single instance of technology-assisted cash skimming - there are no zappers, and no phantomware in California. Is this because Californians are not skimming cash sales with technology, or is this because the California technology works so well that the fraud cannot be detected?

The record in foreign jurisdictions is reasonable clear. Automated sales suppression technology is widely used to skim cash sales, denying the state revenues from consumption taxes that have been paid by the consumer, reducing taxable business profits, and funding a cash hoard out of which unreported employee wages are paid. Government studies …

The Story Of Hewlett-Packard, Barbara Black

Faculty Articles and Other Publications

With the development of the modern corporation, corporate boards have been the locus of corporate authority, and particularly since the 1980s, boards and their performance have been under intense scrutiny. Nevertheless, corporate law has not developed a consistent theory for what boards are supposed to do; instead, it sends mixed messages about the functions and expectations of boards and the appropriate people to sit on them. The HP saga illustrates some of the dilemmas faced by directors confronted by these competing pressures.

Two Ways To Think About The Punishment Of Corporations, Albert Alschuler

Faculty Working Papers

This article compares the criminal punishment of corporations in the twenty-first century with two ancient legal practices—deodand (the punishment of animals and objects that have produced harm) and frankpledge (the punishment of all members of a group when one member of the group has avoided apprehension for a crime). It argues that corporate criminal punishment is a mistake but that viewing it as frankpledge is less ridiculous than viewing it as deodand. The article considers the implications of the choice between these concepts for standards of corporate guilt and for the sentencing of corporate offenders. After a brief historical description …

The Curious Case Of Corporate Criminality, Erik Luna

Scholarly Articles

No abstract provided.

Are Corporate Officers Advised About Fiduciary Duties, Lyman P.Q. Johnson

Scholarly Articles

This Article reports the results of an empirical study of whether and how in-house corporate counsel advise corporate officers about fiduciary duties. The fiduciary duties of officers long have been neglected by courts, scholars, and lawyers, as the Introduction explains, even though executives play a central role in corporate success and failure. The study’s findings, organized by type of company (public or private), size, and attorney position within the firm, show several interesting patterns in advice-giving practices. For example, fewer than half of all respondents provided advice to officers below the senior-most rank. The results raise the possibility that, unlike …

Corporate Law Professors As Gatekeepers, Lyman P. Q. Johnson

Scholarly Articles

None available.

The Case Against Exempting Smaller Reporting Companies From Sarbanes-Oxley Section 404: Why Market-Based Solutions Are Likely To Harm Ordinary Investors, John Orcutt

Law Faculty Scholarship

Section 404 is arguably the most controversial provision of Sarbanes-Oxley (“SOX”). The controversy focuses on whether Section 404’s substantial compliance costs exceed the statute’s benefits, with no consensus on Section 404’s cost-effectiveness. If Section 404 turns out to be cost-ineffective, the companies that are most threatened are smaller companies, as cost-ineffective regulations tend to disproportionately harm smaller companies. This Article considers whether Congress and the SEC should exempt smaller reporting companies from Section 404 compliance, as that would allow for a market-based resolution to the uncertain value of Section 404 for smaller reporting companies. Smaller reporting companies would be relieved …

Race To The Left: A Legislator’S Guide To Greening A Corporate Code, Judd F. Sneirson

Articles

American corporate law tolerates green businesses. Green business decisions that are informed, disinterested, and made in the good-faith best interests of the firm will enjoy deference pursuant to the business judgment rule, whether the decisions maximize shareholder profits or sacrifice them in the name of sustainability. Corporate law generally stops there, however, and neither encourages green business efforts nor particularly discourages them.

States are more or less uniform in this approach, and thus new businesses selecting a state of incorporation have had no green basis for preferring one state’s corporate laws to those of another. Recent efforts in Oregon to …

Społeczna Odpowiedzialność Biznesu. Wymiar Konstytucyjny I Międzynarodowy, Maciej Bernatt

Monografie CARS/CARS Monographs

Czwarta publikacja z serii „Studiów i Monografii Antymonopolowych i Regulacyjnych” – efekt indywidualnego projektu badawczego autora – jest pierwszym w Polsce tak kompleksowym ujęciem zagadnienia społecznej odpowiedzialności biznesu z perspektywy nauk prawnych, zwłaszcza w wymiarze konstytucyjnym i międzynarodowym.

Prezentowane w książce normatywne spojrzenie na społeczną odpowiedzialność biznesu może mieć duże znaczenie praktyczne zarówno jako przyczynek do dyskursu naukowego nad tym zjawiskiem, jak i zachęta do angażowania się przedsiębiorców w działania prospołeczne. Prawne spojrzenie na społeczną odpowiedzialność biznesu pozwala także oderwać to zjawisko od jego tradycyjnego pojmowania jedynie w kategoriach promocji przedsiębiorców. Na szczególną uwagę zasługuje prezentowane przez autora porównanie obowiązków …

The Story Of Francis V. United Jersey Bank: When A Good Story Makes Bad Law, Jay B. Kesten, Reinier H. Kraakman

Faculty Books

This book chapter, which appears in Corporate Law Stories edited by Prof. J. Mark Ramseyer, examines the New Jersey Supreme Court case Francis v. United Jersey Bank. Excerpt: Most students of American corporate law recognize the New Jersey Supreme Court’s opinion in Francis v. United Jersey Bank as a paradigmatic illustration of the director’s duty of oversight. The basic facts of the case are well known: Mrs. Pritchard, the ‘‘proverbial poor widow’’— elderly, ill, and addled by alcohol—served as a director of the family’s company to accommodate her husband. After his death, her sons took control of the enterprise, and …

Corporate Voting, Robert B. Thompson, Paul H. Edelman

Vanderbilt Law Review

What are we to make of shareholder voting? Delaware law presents voting as the ideological underpinning of a corporate governance system that gives directors wide control over other people's money. In the legal commentary, there are recurring descriptions of corporations as representative democracies in which New York Alumni Chancellor's Chair in Law & Professor of Management, Vanderbilt University.

.. Professor of Mathematics and Law, Vanderbilt University. We have benefited from the comments of Jeff Gordon, Sam Issacharoff, Curtis Milhaupt, Larry Ribstein, Lynn Stout, and participants at workshops at New York University, the University of Connecticut, and Emory University, colloquia at …