Store International The Evolution of Legal Business Forms in Europe and the United States: Venture Capital, Joint Venture and Partnership Structures
The Evolution of Legal Business Forms in Europe and the United States: Venture Capital, Joint Venture and Partnership Structures

The Evolution of Legal Business Forms in Europe and the United States: Venture Capital, Joint Venture and Partnership Structures

By Erik P.M. Vermeulen


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The evolution of partnership forms is stimulated by powerful economic forces that can lead to widespread prosperity and wealth creation for a society. Given the importance of closely held firms in the United States and Europe, The Evolution of Legal Business Forms in Europe and the United States argues that partnership law should trouble itself less with historical and descriptive arguments about the legal rules and structure of the partnership form and focus much more on the new analytical apparatus of the economics of organizational form as well the fundamental economic learning that informs the debates on limited liability, partnership rules regarding management and control, conflict resolution and fiduciary duties. Introducing and extending the best available theories from law and economics, particularly those from the theory of the firm, This book¿s analysis demonstrates that the patterns of European partnership law and its recent history are best understood from an economic and comparative law perspective.

By examining the economic theories of the firm and the economics of organization choice, The Evolution of Legal Business Forms in Europe and the United States conceives partnership-type business forms as contractual entities. The key feature of the modern partnership form is that partners have significant flexibility and power to limit their liability, transfer all of their rights, and to freely exit the firm. Another key feature of partnership law is the insight that lawmakers should provide the rules and enforcement mechanisms to regulate the important relationships within the partnership. This book applies an efficiency test to determine which sets of default rules are likely to resolve the main problems in partnerships.

Having identified partnership law with the economic theory of organization, The Evolution of Legal Business Forms in Europe and the United States then goes to argue that most of partnership law is directed at offering bundles of legal rules for different types of firms. Lawmakers should promote partnership rules that attract investors and can be expected to be efficient if they allow entrepreneurs to freely select the bundle of rules that best match their priorities. In a modern vision of partnership law, lawmakers promote economic welfare through creating non-mandatory rules that allow multiple businesses to switch to a favourable business form without significant costs. Jurisdictions plagued by falling incorporations and low levels of small and medium business activity, should abandon the mandatory and standardized framework and the `lock in¿ effect that it promotes, and focus on the mechanisms of legal evolution and rules that tend to mimic the market. This innovation work will have ramifications felt across European jurisdictions, and will be debated by a large audience of policymakers and academic lawyers involved in law reform. Moreover, the book will receive serious attention from students of law and economics, as well as practising lawyers involved in resolving complex issues of organizational law.

Review (s) ¿Vermeulen¿s work makes a significant contribution to the dialogue between legal scholars and policy makers from Europe and the United States on the matter of business entity law reform. The volume is ambitious in scope, thoughtful in approach, and accurate in result. It shows a well-read and nuanced view of the recent American partnership law reform debates. He moves with assurance between different systems of law and analysis, and has a confident sense of what his diverse readers need to know to come to the ultimate discussion with a common sense of the issues and alternatives at hand. Vermeulen¿s work should serve as a starting point for a robust discussion among scholars and policy makers.¿

Publish Date 06/06/2003
Product Line Kluwer Law International
ISBN 9789041120571
SKU 10058631-0001
Table of Contents
Preface CHAPTER 1 Introduction 1. Aim and Scope 2. Part I: The Evolution of Legal Business Forms 3. Part II: The Economic Role of Legal Business Forms CHAPTER 2 Challenges for Business Organization Law 1. The Stasis of 'Traditional Partnership Law' 2. The Genesis of 'New Partnership Law' 3. The Study of 'New Partnership Law': Part I PART I THE EVOLUTION OF LEGAL BUSINESS FORMS LESSONS FROM THE UNITED STATES CHAPTER 3 Theories Of Legal Evolution 1. Introduction 2. The Course and Pattern of Legal Change in an Island Jurisdiction 3. Conclusion CHAPTER 4 Competitive Lawmaking In Federal Systems 1. Introduction 2. The US Experience: Competition among States 3. The European Approach: Centralized Rulemaking 4. Conclusion CHAPTER 5 The Evolution Of Closely Held Business Forms: A Comparative View 1. Introduction 2. The Nature of Partnership-type Business Forms 3. The United States 4. The European Union 5. Conclusion CHAPTER 6 The Evolution Of Business Forms In Europe: A 'New Approach' 1. Introduction 2. Regulatory Competition 3. Uniform Laws, Model Laws, and the Evolution of Business Forms 4. The Study of 'New Partnership Law': Part II 174 PART II THE ECONOMIC ROLE OF LEGAL BUSINESS FORMS LESSONS FOR LAWMAKERS CHAPTER 7 Economic and Legal Aspects Of Business Forms 1. Introduction 2. Competitive Lawmaking and Economic Analysis 3. A Critique of the Legal Entity Doctrine 4. Economic Theories of the Firm 5. Conclusion: the Role of the Law CHAPTER 8 A Menu Of Closely Held Business Forms 1. Introduction 2. A Business Form for Small Business Firms 3. Special Closely Held Business Fonns 4. Conclusion CHAPTER 9 The Venture Capital Example: An Innovative Business Form For The European Venture Capital Industry 1. Introduction 2. The Need for a Genuine European Venture Capital Market 3. The United States: 'Venture Capital Contracts' 4. The Introduction of a Corporate-type 'LLC' in Europe 5. Conclusion CHAPTER 10 Conclusion 1. Introduction 2. Conclusions Bibliography, Index