From The Perspective That The Firm Is A Nexus Of C

FROM THE PERSPECTIVE THAT THE FIRM IS A NEXUS OF CONTRACTS, WHAT, AS A NORMATIVE MATTER, SHOULD BE THE ROLE OF CORPORATE LAW? WHAT are THE IMPLICATIONS FOR THE CONTENT OF CORPORATE LAW? From the perspective that the business firm is ripe a series of contractual relationships, corporate honor of constitution should unless focus on facilitating these relationships in the about effective manner.7 The nigh important contri aloneion of corporate law should be to allow the firm serve the role of the common counter political companionship in contractual relationships by permitting the firm to act as a single counter party that is distinct from the persons managing or owning the firm. In this way, corporate law can enhance the ability of these individual persons to engage in joint projects.8 The nexus of contracts expect refers to the market-oriented and voluntary nature of firms and rejects the nonion that a firm depends on the state for its existence. This justifies preserving the corporate law status quo; because the firm is contrac- tual in nature, the firms corporate governance reflects what the parties have freely chosen. The standard corporate governance social system where shareholders take for directors who and then appoint officers, is therefor not seen as the determination of the legis- lature, but as the choice of shareholders, boards and all others involved in the firm.

This structure arises from choices of market participants, who assumably are in the best amaze to cook up these decisions.9 According to this rationale, the implications for the content of co rporate law are that corporate law should me! rely act as a rubber eraser net for issues in which firms have not foreseen in their contractual relationships. It should provide default rules to which firms are cumber if they do not state otherwise and merely be a shape of exten- sion of contract law. Corporate law should therefor consist of directory rules of law and not of mandatory law. 7 G.M. Hayden and M.T. Bodie,The Uncorporation and the Unraveling of Nexus of...If you desire to get a full essay, order it on our website: OrderCustomPaper.com

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