Business Organizations Law Commons^™

From Loyalty To Conflict: Addressing Fiduciary Duty At The Officer Level, Usha Rodrigues

Florida Law Review

Conflicts of interest are the quintessential agency cost—the constant, lurking danger that agents may seek their own personal gain, rather than the good of the corporation. Yet many corporate employees lack knowledge as to exactly what constitutes a conflict of interests. This ignorance facilitated the kind of fraud seen in Enron, WorldCom, and the options backdating scandals, and may help explain the out-sized payouts that many high-level corporate officers received even as the financial institutions they headed verged on self-destruction, Each case required not only affirmative fraudulent behavior on the part of a few, but also the tacit acceptance of …

Beyond The Public Square: Imagining Digital Democracy, Mary Anne Franks

Articles

To create online spaces that do not merely replicate existing hierarchies and reinforce unequal distributions of social, economic, cultural, and political power, we must move beyond the simplistic clich6 of the unregulated public square and commit to the hard work of designing for democracy.

When we say 'public square,' ... we need to ask- who or what is this public? Who owns this space, what makes it public? . . . This is the essence of democracy: the ability to question power, and the power to do so. - Tom Wilkinson

Appendix: Board Gender Diversity: A Path To Achieving Substantive Equality In The United States, Kimberly A. Houser, Jamillah Bowman Williams

William & Mary Law Review Online

Appendix to article in William & Mary Law Review vol. 63, no. 2 (2021), "Board Gender Diversity: A Path to Achieving Substantive Equality in the United States" by Kimberly A. Houser and Jamillah Bowen Williams.

The Personification Of The Partnership, Harwell Wells

Vanderbilt Law Review

What does it mean to say a business association is a legal person? The question has shadowed the law of business organizations for at least two centuries. When we say a business is a legal person we may be claiming that the law distinguishes its assets, liabilities, and obligations from those of its owners; or that it has a “real will” and personality apart from its owners; or that it in some way can carry or assert rights generally ascribed to natural persons. This Article sheds new light on these old questions by looking at an oft-overlooked business form, the …

Assessing The Liability Exposure Of Public Joint-Stock Companies' Directors Under The Liability Rules In Saudi Arabia, Ahad Ali Alomran

Maurer Theses and Dissertations

Historically, the business environment in Saudi Arabia has been considered low risk. However, with the introduction of Vision 2030 in 2016, the socioeconomic transition and regulatory evolution witnessed in Saudi Arabia have reshaped the business environment and redefined the risk landscape faced by public companies and their boards. The increase in the market regulator’s monitoring and penalizing activities, the legislative reforms of management liability rules, the approval of securities class action, and the unprecedented rise in shareholder activities against their board of directors are recent developments that directly affect directors’ exposure to liability. Generally, operating in a legal system with …

The Use And Misuse Of Fiduciary Duties: Corporate Social Responsibility And The Standard Of Review, Jonathan R. Povilonis

William & Mary Business Law Review

This Article provides a crucial corrective to the “corporate social responsibility” debate, which concerns whether corporations have the obligation to protect or serve the interests of groups other than their shareholders, like employees or customers (often called “stakeholders”). Scholars on one side of the debate have repeatedly presumed that corporate directors’ fiduciary duties to shareholders play an important role in protecting shareholders from decisions that favor stakeholders at their expense. Scholars on the other side agree that fiduciary duties provide meaningful protection against unfavorable conduct but argue that directors should also owe fiduciary duties to stakeholders so they may be …

Mapping Human Rights-Based Climate Litigation In Canada, Lisa Benjamin, Sara L. Seck

Articles, Book Chapters, & Popular Press

In line with global trends, there has been an increase in human rights-based climate litigation brought in Canadian courts in recent years. Some litigants invoke human rights as found in the Canadian Charter of Rights and Freedoms to push federal and provincial governments to take seriously the implementation of their climate obligations. Other litigants invoke procedural environmental human rights to engage in free speech and peaceful protest in the face of government action supporting fossil fuel consumption or expansion. At the same time, the Supreme Court of Canada has recognized that Canadian courts could develop civil remedies for corporate violations …

Regulatory Competition And State Capacity, Martin W. Sybblis

William & Mary Business Law Review

This Article explores an underlying tension in the regulatory competition literature regarding why some jurisdictions are more attractive to firms than others. It pays special attention to offshore financial centers (OFCs). OFCs court the business of nonresidents, offer business friendly regulatory environments, and provide for minimal, if any, taxation on their customers. On the one extreme, OFCs are theorized as merely products of legislative capture— thereby lacking any meaningful agency of their own. On the other hand, OFCs are conceptualized as well-governed jurisdictions that attract investment because of the high quality of their laws and legal institutions—indicating some ability to …

Unep And Marine & Environmental Law Institute, "Plastics Toolbox: Business, Human Rights, And The Environment" (Last Updated November 2021) (Dalhousie University, Schulich School Of Law), Marine And Environmental Law Institute

Human Rights-based Approaches to Plastic Pollution

The Plastics Toolbox: Business, Human Rights, and the Environment, compiles good practices and cross-cutting guidance on a human rights-based approach to plastic pollution prevention and management with a focus on capacity building of governments and businesses in the East Asian Seas region. This compilation of resources, guidance, tools and trainings was prepared by a team of researchers at Dalhousie University's Marine and Environmental Law Institute under the direction of project lead Dr Sara L Seck, with funding from the United Nations Environment Programme. The materials in the toolbox were gathered from May to August 2021 and updated in November 2021. …

Board Gender Diversity: A Path To Achieving Substantive Equality In The United States, Kimberly A. Houser, Jamillah Bowen Williams

William & Mary Law Review

While the European Union (EU) was founded on the concept of equality as a fundamental value in 1993, the United States was created at a time when women were considered legally inferior to men. This has had the lasting effect of preventing women in the United States from making inroads into positions of power. While legislated board gender diversity (BGD) mandates have been instituted in some EU countries, the United States has been loath to take that route, relying instead on the goodwill of corporate boards, with little progress. On September 30, 2018, however, California enacted a law that has …

Team Production Revisited, William Wilson Bratton

Articles

This Article reconsiders Margaret Blair and Lynn Stout's team production model of corporate law, offering a favorable evaluation. The model explains both the legal corporate entity and corporate governance institutions in microeconomic terms as the means to the end of encouraging investment, situating corporations within markets and subject to market constraints but simultaneously insisting that productive success requires that corporations remain independent of markets. The model also integrates the inherited framework of corporate law into an economically derived model of production, constructing a microeconomic description of large enterprises firmly rooted in corporate doctrine but neither focused on nor limited by …

Shareholder Wealth Maximization: A Schelling Point, Martin Edwards

St. John's Law Review

(Excerpt)

Imagine a reality television game show where two contestants begin the game in two different places in New York City. The object of the game is for the two contestants to find each other, but they do not know anything about each other and they have no way of communicating. If they succeed, both contestants win a prize. If they fail, they get nothing. With no ability to explicitly bargain over the meeting, the parties have to make an educated guess about what the other person is most likely to do. Most people, confronted with this sort of tacit …

The Cost Of Doing Business? Corporate Registration As Valid Consent To General Personal Jurisdiction, Matthew D. Kaminer

Washington and Lee Law Review Online

Every state has a statute that requires out-of-state corporations to register with a designated official before doing business there, but courts disagree on what impact, if any, those statutes can or should have on personal jurisdiction doctrine. A minority of states interpret compliance with their registration statutes as the company’s consent to general personal jurisdiction, meaning it can be sued on any cause of action there, even those unrelated to the company’s conduct in that state. The United States Supreme Court upheld this “consent by registration” theory over 100 years ago, but since then has manifested a sea change in …

It's None Of Your Business: State Regulation Of Tribal Business Undermines Sovereignty And Justice, Robin M. Rotman, Sam J. Carter

Faculty Publications

The U.S. Constitution grants the federal government plenary power over American Indian affairs, yet states are increasingly attempting to assert regulatory and tax jurisdiction over tribal businesses. This overreach threatens tribal sovereignty and contravenes the terms of treaties entered between the United States and American Indian tribes. This Article begins by examining the legal foundations of federal, state, and tribal relations. It then examines recent cases across four business sectors - gaming, tobacco sales, petroleum sales, and online lending - in order to illustrate the pervasive jurisdictional challenges faced by courts in cases involving tribal businesses. This Article offers three …

Sacred Corporate Law, Giancarlo Anello, Sergio Alberto Gramitto Ricci, Mohamed Arafa

Faculty Works

This Article investigates the sacred origins of the corporate form. It sheds light on the sacred rituals performed to establish Ancient Roman cities as legal entities. It discusses the role of the Roman Catholic Church in developing the corporate form and in giving birth to a systemized set of rules regulating corporations, which we commonly call corporate law. It analyzes the limitations to the use of the corporate form in Islamic law as well as the streams of Islamic law jurisprudence that recognize legal capacity to specific entities with religious, social, or charitable purposes. It surveys the characteristics of two …

Corporate Governance Gaming: The Collective Power Of Retail Investors, Sergio Alberto Gramitto Ricci, Christina M. Sautter

Faculty Works

The GameStop saga and meme stock frenzy have shown the pathway to the most disruptive revolution in corporate governance of the millennium. New generations of retail investors use technologies, online forums, and gaming dynamics to coordinate their actions and obtain unprecedented results. Signals indicate that these investors, whom we can dub wireless investors, are currently expanding their actions to corporate governance. Wireless investors’ generational characteristics suggest that they will use corporate governance to pursue social and environmental causes. In fact, wireless investors can set in motion a social movement able to bring business corporations to serve their original partly-private-partly-public purpose. …

The Breakdown Of The Public–Private Divide In Securities Law: Causes, Consequences, And Reforms, George S. Georgiev

Faculty Articles

As a regulatory scheme, U.S. securities law has traditionally been designed around a set of lines—the “public–private divide”—which separate public companies, public capital, and public markets, from private companies, private capital, and private markets. Until the early 2000s, the lines were successful in establishing two largely coherent legal realms—a highly regulated public realm and a lightly regulated private realm. A series of bold and often-inconsistent reforms between 2002 and 2020, however, have transformed this longstanding regime into a low-friction system wherein public capital flows to both public and private companies, private capital is ever more abundant, and firms can effectively …

Sustainable Business Law? The Key Role Of Corporate Governance And Finance, Jason J. Czarnezki, Colin Meyers

Elisabeth Haub School of Law Faculty Publications

Lawyers, law schools, and corporate entities have shown an increased interest in sustainable business strategies. This is reflected by the increase in sustainability practice groups, law school courses, and textbooks focusing on the relationship between sustainability and business law; lawyers moving into executive-level sustainability positions in the private sector; and the proliferation of corporate sustainability policies, as well as increased interest in mitigating climate risk and engaging in sustainable finance. But what exactly is sustainable business law, and what role do lawyers play in advancing sustainability in the corporate world? This Article argues that “sustainable business law” has emerged as …

Why The Congressional Review Act Should Be Repealed, Alex Lipow

William & Mary Environmental Law and Policy Review

The Congressional Review Act (“CRA”) is a procedure that allows the political branches to quickly repeal certain regulations promulgated by administrative agencies without going through the arduous rule-making process traditionally required. Although it had been successfully used only once before 2017, President Trump and Republicans in Congress used the CRA to repeal sixteen regulations in 2017 and 2018 while President Biden and Democrats in Congress used the CRA three times in 2021. Because the CRA has been used rarely, and its central provisions are barely adjudicated in the judiciary, there are interesting legal questions about how expansively the law may …

The Federal Option: Delaware As A De Facto Agency, Omari Scott Simmons

Washington Law Review

Despite over 200 years of deliberation and debate, the United States has not adopted a federal corporate chartering law. Instead, Delaware is the “Federal Option” for corporate law and adjudication. The contemporary federal corporate chartering debate is, in part, a referendum on its role. Although the federal government has regulated other aspects of interstate commerce and has the power to charter corporations and preempt Delaware pursuant to its Commerce Clause power, it has not done so. Despite the rich and robust scholarly discussion of Delaware’s jurisdictional dominance, its role as a de facto national regulator remains underdeveloped. This Article addresses …

We Have To Tell Them What?: The New Corporate Transparency Act And Forming Business Entities In Massachusetts, James J. Wheaton, Gustavo De La Cruz Reynozo

Faculty Publications

The details and requirements of business entity formation have traditionally been the sole province of state law. Most states, like Massachusetts, maintain corporate annual report filing requirements that involve the public disclosure of corporate officers and directors, and some impose similar requirements for LLCs or other business entities. Those requirements focus on active managers of the entities, not information about the beneficial ownership of entities formed under their laws. However, the recently enacted federal Corporate Transparency Act (CTA) will fundamentally change entity disclosure.

By January 1, 2022, the Treasury Department will be promulgating regulations that will require every state filing …

Corporate Venture Capital, Darian M. Ibrahim

Faculty Publications

This Article makes the case for corporate venture capital as a potentially game-changing entrant into entrepreneurial finance. Part II begins by retracing the ancillary players in entrepreneurial finance and their roles in the startup ecosystem. After finding each of them incapable of denting the venture capitalist’s current dominance, Part III introduces the large corporation as venture capitalist. Part III discusses the growing scale of corporate venture capital and why it may be desirable for startups, innovation, and society as a whole. Part IV looks at legal differences that may become important for corporate venture capitalists to consider, including securities, antitrust, …

Racism As A Human Rights Risk: Reconsidering The Corporate 'Responsibility To Respect' Rights, Erika George

Faculty Scholarship

Darnella Frazer, a teenage witness to a fatal police encounter, used social media to share her cell phone video footage capturing a white police officer casually kneeling on the neck of a handcuffed Black man named George Floyd for nearly nine minutes. Her video rapidly went viral, sparking civil unrest across the United States (US) and protests around the world.¹ Independent experts of the Special Procedures of the United Nations Human Rights Council came together to issue a joint statement condemning 'systemic racism' and 'state sponsored racial violence' in the US.² George Floyd was not the first unarmed …

Rico Had A Birthday! A Fifty-Year Retrospective Of Questions Answered And Open, Randy D. Gordon

Faculty Scholarship

The Racketeer Influenced and Corrupt Organizations Act (RICO) came into the world in 1970, a time of great social upheaval that was accompanied by shifting attitudes towards both crime and civil litigation. From the outset, the statute’s complexity, ambiguity, and uncertain purpose have confounded courts and commentators. At least some doubts as to the statute’s meaning and application arise because it has criminal and civil components that subject it to the twin—yet antithetical—social impulses to be “tough on crime” while containing a perceived “litigation explosion.” In this Article, I situate RICO in this larger context and offer that context as …

The New Law On Foreign Interference: What's Next For Businesses?, Tan K. B. Eugene, Benjamin Joshua Ong

Research Collection Yong Pung How School Of Law

The Foreign Interference (Countermeasures) Bill (Fica) was passed in Parliament on Monday after about 10 hours of impassioned debate. Despite the government agreeing to several amendments proposed by the Workers' Party, the substance was not changed in any significant way. Although the government provided more details on how Fica is to operate, more details will be unveiled when it comes into operation. What does all this mean for businesses?

The New Law On Foreign Interference – What’S Next For Businesses, Tan K. B. Eugene, Benjamin Joshua Ong

Research Collection Yong Pung How School Of Law

In a joint commentary, SMU Associate Professor of Law Eugene Tan and SMU Assistant Professor of Law Benjamin Joshua Ong discussed what the Foreign Interference (Countermeasures) Bill (Fica) means for businesses. They opined that businesses could have disclosure policies for themselves and their stakeholders, akin to conflict of interest disclosures. They also noted that more can be done to clarify the limits to government powers under Fica, and pointed out that conversations about foreign interference must go beyond Fica.

A Gilti Fix For An Employment Tax Glitch, Richard Winchester

Pepperdine Law Review

Self-employed individuals who operate through a business entity can often dictate how much employment tax they pay, if any. That’s because the rules permit them to control whether their earnings count as labor income – which is subject to employment tax – or the returns on any capital invested in their business – which is not subject to the tax. The GILTI rules enacted as part of the 2017 Tax Act assume that capital investments generally earn a 10 percent annual rate of return. That same assumption can be used to allocate the earnings of a self-employed individual between the …

Corporate Governance Gaming: The Collective Power Of Retail Investors, Sergio Alberto Gramitto Ricci, Christina M. Sautter

Nevada Law Journal

The GameStop saga and meme stock frenzy have shown the pathway to the most disruptive revolution in corporate governance of the millennium. New generations of retail investors use technologies, online forums, and gaming dynamics to coordinate their actions and obtain unprecedented results. Signals indicate that these investors, whom we can dub wireless investors, are currently expanding their actions to corporate governance. Wireless investors’ generational characteristics suggest that they will use corporate governance to pursue social and environmental causes. In fact, wireless investors can set in motion a social movement able to bring business corporations to serve their original partly-private partly-public …

Implementing An Insolvency Framework For Micro And Small Firms, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Micro-, small-, and medium-sized enterprises (MSMEs) represent the vast majority of businesses in most countries around the world. Despite the economic relevance of these firms, most insolvency jurisdictions do not provide adequate responses to MSMEs. Moreover, with a few exceptions, the academic literature on insolvency law has not traditionally focused on the treatment of MSMEs in insolvency. This article seeks to contribute to the debate by exploring the primary features and problems of MSMEs in insolvency as well as the weaknesses of the ordinary insolvency framework to deal with MSMEs. It also provides a general overview of the primary reforms …

Insolvency Law In Emerging Markets, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

A well-functioning corporate insolvency system can serve as a valuable tool to promote entrepreneurship, innovation, access to finance and economic growth. Therefore, if having an efficient insolvency framework is essential for any country, it becomes even more important for emerging economies due to their potential for growth and their greater financial needs. Unfortunately, the academic literature has generally paid more attention to the regulation of corporate insolvency in developed countries. Thus, with some notable exceptions, it has largely omitted the debate about the optimal design of insolvency law in jurisdictions that, in addition to requiring a more active policy debate, …