Business Associations II

What is the nature of the firm? Why has the publicly-held corporation come to dominate economic activity throughout the world? In answering these questions this course turns to both corporation theory and the law of the publicly-held corporation. We first consider the nature of the relationship among shareholders, managers, directors and creditors, and investigate how (and whether) the corporate form mitigates conflicts and promotes common interests among these actors. We then examine the legal and market constraints on those who own and those who control the public corporation, as well as the power of investors to influence those in control through the market, through litigation and through voting. Particular attention will be paid to corporate governance issues raised by recent corporate failures, and Congress’ reaction as reflected in the Sarbanes-Oxley Act.

Prerequisite: Business Associations I