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corporation law
Hornbooks: Bainbridge, Corporation Law & Economicsor Easterbrook & Fischel, The Economic Structure of Corporate Law
Corporations are legal individuals with due process rights that can be sue or be sued; however, corporations can only act through their agents. Note that giving corporations a legal personality can help solve the [collective action problem] created by a diffuse injury spread among shareholders, none of which have an individual incentive to seek remedy. (Additionally, where corporations are repeat players in transactions with actors who have injured them, corporations may have an incentive not to sue those actors.)
Basic problems of corporate law
-facilitating relationships among the 'owners' of the corporation-stockholders v stockholders
-stockholders v creditors (ex stockholders want risky projects to get better returns; creditors want safe projects to reduce risk)
-facilitating relationships between shareholders and managers
-facilitating relationships between shareholders and other stakeholders
Actors involved in corporations
corporate form
incorporation
Theory terms
agent
agency costs
enterprise liability
fiduciary duty
[principal]
promoters - the persons who originally forms a corporation
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