The Multinational Challenge to Corporation Law : The Search for a New Corporate Personality

Modern multinational corporate groups of incredible complexity conducting world enterprises through numerous subsidiaries have rendered traditional corporation law archaic. The traditional concept of each corporation as a separate legal unit clashes with modern economic realities and frustrates effective regulation when applied to affiliated corporations collectively conducting a common enterprise. In response, there is emerging a law of corporate groups directed at the enterprise rather than its corporate components. As national legal systems begin to apply enterprise law to multinationals, including their foreign companies, the resulting extraterritorial application of national law inevitably leads to international controversy. Resolution of the problems presented by conflicting national regulation of multinational enterprises presents a major challenge to international law and foreign relations law, as well as to corporation law. This volume is a comprehensive review and analysis of these major legal developments and their economic and political implications. It concludes with a pathbreaking analysis of the jurisprudential implications of the changing corporate personality in enterprise law focusing on economic organization rather than on the conceptualized legal entity of yesterday. Contents......Page 16 I. Historical Development......Page 22 The Corporation as a Legal Unit......Page 24 The Emergence of Limited Liability in English Corporations......Page 29 Limited Liability in the United States......Page 31 English Joint Stock Companies and the Struggle over Limited Liability......Page 35 Summary......Page 40 Jurisprudence and the Corporate Personality......Page 42 Competing Theories of the Corporation......Page 46 Constitutional Applications......Page 51 Statutory Construction......Page 66 Summary......Page 67 Corporate Power to Acquire and Hold Stock of Another Corporation......Page 73 The Emergence of Corporate Groups......Page 77 Corporate Groups and Limited Liability......Page 79 Corporate Groups and the Regulation of Business Activity......Page 81 II. Entity or Enterprise in Dealing with Corporate Groups: The American Judicial and Statutory Response......Page 84 Disregard of the Corporate Entity......Page 86 Corporate Groups in the Courts......Page 89 Railroad Litigation and the Beginnings of Enterprise Law......Page 91 Conceptual Problems in the Disregard of the Corporate Entity......Page 100 Adaptation of the "Alter Ego" Concept......Page 102 "Piercing the Veil Jurisprudence"......Page 105 Development of Enterprise Law: General......Page 110 Liberalized "Piercing the Veil Jurisprudence"......Page 111 The Supreme Court and Enterprise Principles......Page 117 Statutory Law......Page 121 Judicial Procedure......Page 137 Bankruptcy......Page 138 The Different Faces of Enterprise Law......Page 140 6. Economic Dimensions: The Role of Limited Liability......Page 142 Limited Liability for Whom: Public Shareholders or Constituent Companies of the Group?......Page 144 The Perceived Advantages of Limited Liability......Page 146 Undesirable Consequences of Limited Liability......Page 154 Limited Liability and Corporate Groups......Page 159 Special Problems Presented by Corporate Structure......Page 162 Inapplicability of Market Analysis to Statutory Law......Page 168 Summary......Page 169 III. World Dimensions......Page 172 7. European and British Commonwealth Experience with Enterprise Law......Page 174 The United Kingdom......Page 175 The British Commonwealth......Page 180 Continental Europe......Page 182 Summary......Page 188 8. National Law and Multinational Business: Enterprise Law and Extraterritoriality......Page 189 International Law......Page 192 Home Country Extraterritoriality in the United States......Page 198 Host Country Extraterritoriality......Page 208 Foreign Enforcement or Recognition of Host Country Judgments......Page 212 Other Applications of Extraterritoriality......Page 213 Assertion of Jurisdiction to Adjudicate Over Foreign Affiliates......Page 218 Economic Limitations to National Legal Policy......Page 220 Summary......Page 221 IV. Jurisprudential Implications......Page 224 9. Legal Rights, Legal Responsibilities, and Recognition of the Legal Unit: Individuals and Physical Objects......Page 226 Legal Units, Legal Attributes, and Legal Personality......Page 227 Legislative and Judicial Recognition of Legal Units......Page 229 Individuals......Page 232 Maritime Vessels and Other Physical Objects......Page 233 10. Legal Rights, Legal Responsibilities, and Recognition of the Legal Unit: Organizations......Page 237 Partnerships and Associations......Page 238 Statutory Creation of Novel Legal Units......Page 245 Government Agencies......Page 249 Corporations......Page 250 11. The Jurisprudence of Enterprise Law......Page 252 The Traditional Legal Entity and the Economic Entity No Longer Match......Page 253 Enterprise Law as the Recognition of the Economic Entity as the Legal Unit......Page 257 Enterprise Law as the Imposition of Derivative Liability......Page 259 Enterprise Law as a Partial Elimination of Limited Liability......Page 261 Enterprise Law as a Form of "Privity"......Page 263 Enterprise Law, Economic Interrelationship, and Relational Law......Page 265 Conclusion......Page 274 Notes......Page 276 Table of Cases......Page 316 B......Page 324 C......Page 325 E......Page 327 F......Page 330 I......Page 331 L......Page 332 M......Page 333 P......Page 334 R......Page 335 S......Page 336 W......Page 337 This volume reviews the challenge of multinational corporations to the legal systems of the world. The author argues that traditional concepts of the corporation, formulated centuries ago, no longer fully serve the needs of modern industrialized society