Business Associations

Steinbuch 2008 |
Business Associations
Steinbuch Spring 2008 |


Chapter 1: Introduction to the Law of Enterprise Organization

  * Efficiency and the Social Significance of Enterprise Organization, Public policy
      * Wealth Creation and the Corporate Form of Organization
        * Corp law deals with the creation and governance of the private legal entities that are the principal economic actors in the modern world
        * Dominates in all instances where technology creates economies of scale
        * Balancing several goals
            * Allow parties to do what they want to do in business
            * Protecting people both inside/outside business enterprise
        * What do we mean by Efficiency?
            * economic efficiency: the principal standard by which corporate law should be evaluated; elevation of utility; a subjective perspective
              * the ‘American way of business’ is accepted argument today, but not whole argument for this nature
                  * address problems of having a small group of people run a business that effects thousands
              * Pareto Efficiency: a given distribution of resources is efficient when, and only when, resources are distributed in such a way (within a given group or territory) that no reallocation of resources can make at least one person better off without making at least one other person worse off
                  * Happens only through voluntary exchange
                  * These transfers are those that are certain to increase social welfare starting from a fixed starting point; legitimacy of this distribution is often contested
                  * Bad way to evaluate/criticize law of ent org.
              * Kaldor-Hicks Efficiency: what we refer to when say ‘efficiency’
                  * Actual payment of any compensation is NOT stipulated in this def
                  * Because information is imperfect and transactions are costly,...