“It is now widely recognized that legal entity status fulfills important economic functions by separating a firm’s business assets and the personal assets of its founders, directors, or shareholders, and that this separation is stronger in corporations than in partnerships because corporate assets are locked in and controlled by an independent board. This institutional arrangement, which cannot be achieved by contract alone, mitigates collective action and commitment problems and helps foster surplus-enhancing specific investments …” (more)
[David Gindis, Oxford Business Law Blog, 22 October]
First posted 2020-10-22 17:57:21
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