Download ~ For Optional Federal Incorporation. by The Journal of Corporation Law ~ Book PDF Kindle ePub Free
eBook details
- Title: For Optional Federal Incorporation.
- Author : The Journal of Corporation Law
- Release Date : January 22, 2010
- Genre: Business & Personal Finance,Books,
- Pages : * pages
- Size : 300 KB
Description
For decades, state chartering of public corporations and Delaware's domination of this activity have been criticized by many business law scholars. (1) They believe, as Bill Cary put it, that Delaware has led a "race for the bottom" that has "watered the rights of shareholders ... down to a thin gruel." (2) To escape this "race for the bottom," some have urged mandatory federal chartering of public corporations. (3) Even among critics of state chartering, this position has never commanded broad support for fear that mandatory federal incorporation would only make matters worse. (4) Whatever the flaws of incorporation in Delaware, they cannot be too bad, or investors would flee Delaware corporations for companies chartered in other states. Because mandatory federal incorporation would preempt all competition, it threatens abuse with no means of escape. This objection disappears, though, if federal incorporation were voluntary. (5) The federal government then would simply offer a 51st option that would be elected only if superior to the other 50. If the choice were entrusted to shareholders, they could escape the status quo in which states compete for franchise fees primarily by appealing to corporate executives. Even if federal incorporation never became dominant, its potential appeal to investors would prod Delaware to pay them more heed.
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