Columbia Law School
Sky Blog
Ownership Piercing
In a new article, I build upon the paradox of ownership. My central thesis is that those who own are not always in control; therefore, those who control should be held accountable like the owners would if they were …
LLC
Covid and the Corporate Family
My article, Corporate Family Matters, proposes a definition of and governance regime for a particular type of corporate group – the family. I define the family as an enterprise formed by weaving corporations, partnerships, and LLCs together into a …
Why Delaware Dominates Incorporations and the Creation of Other Forms of Business
Delaware’s success in attracting corporate formations is well known, but explanations for it vary. In a recent paper, I test these explanations as well as the reasons for Delaware’s success in attracting other types of business formation I find evidence …
Corporate Governance for Regulation A+ Issuers
Regulation A+, an exemption from registration that took effect in 2015 and allows small companies to issue stock to the general public, presents interesting questions of corporate governance.
The maximum offering size of $50 million means that most Reg A+ …
Introducing the Totally Unnecessary Benefit LLC
The rapid proliferation of state statutes authorizing so-called “benefit” corporations—starting with Maryland in 2010 and spreading to over 30 states by 2018—has been premised in large part on the assertion that conventional corporate law mandates shareholder primacy. Under this legal …
Cahill Discusses Amendments to Delaware Limited Liability Company Act
Amendments to the Delaware Limited Liability Company Act (the “DLLCA”) previously introduced in April 2018 were signed into law on July 24, 2018[1]. The amendments enable a Delaware limited liability company (an “LLC”) to engage in several new …
Fried Frank Discusses the Obligations of LLC Directors and Managers
There are now more than twice as many entities formed in Delaware as LLCs and other alternative entities as are formed as corporations. Private equity funds and hedge funds often are formed as LLCs or limited partnerships to take advantage …
Social Enterprise Laws and Director Primacy’s Demise: Risks to Governance and Growth
Businesses often face criticism for putting profit over people and for sometimes ignoring the needs of various stakeholders, including employees and communities. This reality has led to a variety of efforts, including the corporate social responsibility movement, seeking to encourage …
Protecting LLC Owners While Preserving LLC Flexibility
Limited liability companies, or LLCs, have emerged as the entity of choice for new businesses. The form attracts many everyday owners and entrepreneurs as an easy way to combine corporation-style limited liability protection with partnership-style tax treatment. LLCs also offer …
Fried Frank Discusses Delaware Decision Absolving LCC Board of Duty to Maximize Price
In Miller v. HCP (Feb. 1, 2018), the Court of Chancery dismissed claims made against the members of a limited liability company board, a majority of whom had been appointed by the private equity firm that was the company’s controlling …
How Should the Law Classify Decentralized Businesses?
In July 2017, the Securities and Exchange Commission (SEC) issued a ruling on The DAO, a decentralized smart-contract based investment fund, determining that the tokens it sold were unregistered securities and warning that other initial coin offerings (ICO) may need …
Opting Out of Fiduciary Duties and Liabilities in U.S. and U.K. Business Entities
The degree to which business participants ought to be free to limit or eliminate fiduciary duties and associated liabilities remains a hotly contested matter in many jurisdictions. In a new chapter forthcoming in Edward Elgar’s Research Handbook on Fiduciary Law…
The Ethics of Representing Founders
Lawyers for startups typically serve as counsel to the new organization, with all of the complications that accompany representing an entity. But consider those lawyers as they perform legal work for the enterprise before any organization exists. Who are their …
How Do LLC Owners Contract Around Default Statutory Protections?
Limited liability companies, or LLCs, have quickly become the form of choice for new businesses. Companies ranging from the well known, like Chrysler, to the more experimental, such as French fry vending machine makers, to local flooring installers all organize …
A Primer on the Uncorporation
More and more companies appear with strange abbreviations behind their business name. Consider Chrysler Group LLC (instead of Inc.) or LVMH Montres & Joaillerie France SAS. Some even speak about the “endangered corporate form” and point to the rise of …