ABSTRACT
Corporate groups dominate the American economy. Known publicly by a single name – Chevron, Apple, McDonald’s, or Google – these companies are a web of affiliated entities, each with its own separate legal identity. Yet, corporate laws have failed to develop a statutory scheme that acknowledges these relationships among entities. While corporate personhood, separateness, and the accompanying liability protection are the primary reasons for using the corporate form, or business entities in general, form can be exploited by bad actors who seek to take advantage of the natural legal silos that define each legal entity in a corporate group as a stand-alone person. These legal silos enable bad actors to hide in plain sight, or to give the perception of a full disclosure without consequence, making some of the most egregious conduct either fraud that is difficult to unravel, or behavior that is disturbing but legal. This oversight leaves the system vulnerable to market manipulation through complex business structure. As a result, consumers and investors, many concerned with corporate social responsibility and impact investing, and motivated to do business with companies that support their social causes, can be manipulated into investing and spending by the silos and veils of separateness …
Chatman, Carliss, Corporate Family Matters (September 22, 2020).
First posted 2020-11-15 06:57:54
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