Limited liability, shareholder rights and the problem of incarnate irresponsibility
paddy field Ireland*
There has long been a dip to see the incorporate jural form as presently constituted as economically determined, as the more or less indispensable product of the demands of advanced technology and economic ef?ciency. Through an examen of its historical emergence, focusing in particular on the conception of prevalent limited liability and the development of the modern teaching of separate corporate personality, this paper takes issue with this view, arguing that the corporate legal form was, and is, in large part a political construct developed to accommodate and protect the rentier investor. It is, moreover, a construct which institutionalises irresponsibility. Against this backdrop different ways of trying to fragment the problem of corporate irresponsibility are explored. The key, the paper suggests, is to be found in decoupling the privilege of limited liability from rights of control. mention words: Corporate governance, Corporate irresponsibility, Limited liability, Rentier investment JEL classi?cations: B10, B20, B50, K00, L00, N00, D20
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1. Introduction
Free incorporation by registration came to Britain in 1844, followed in 1855 by general limited liability, effectuateting in place two of the primaeval elements of the corporate legal form that has come to dominate business line organisation around the world. There has long been a tendency to see the emergence of the corporate legal form as not requiring much in the way of explanation. It is widely regarded, as one group of corporate law scholars recently put it, as induced by economic exigencies (Kraakman et al., 2004, p. 1). Its key elementsâ€"legal personality, limited liability, transferable shares, delegated management and...If you want to get a full essay, order it on our website: Ordercustompaper.com
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