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

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

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

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

Synopsis

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.

Excerpt

Multinational corporations are challenging traditional concepts of corporation law and international law. Legal concepts fashioned to serve the needs of the largely agrarian society of yesterday, in which the role of business enterprise was both limited and local, have become archaic in a world where business is conducted worldwide by giant corporate groups, composed of affiliated companies organized in dozens of countries.

In response, the law is fashioning new doctrines of law, reformulating the outmoded doctrines inherited from a very different society to a dramatically changed world corporate economy. This volume examines the emerging enterprise law that is changing the traditional theory of the corporation based on the small local corporations of the nineteenth century to accommodate the reality of the modern world of corporate groups. It goes further and introduces for the first time a jurisprudential view of the legal personality of the corporate group.

The critical examination of the traditional jurisprudential foundations of corporation law is overdue. Corporation law evolved from early ecclesiastical roots over centuries of English legal development and had become firmly established by the time of Sir Edward Coke. The corporation was recognized as a separate juridical entity, created by an act of the sovereign, with rights and responsibilities separate and distinct from those of its shareholders. After the Revolution, the English law was incorporated intact into American law, and the traditional concepts prevail today.

Developed at a stage in legal evolution when a corporation could . . .

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