Abstract

http://ssrn.com/abstract=2177049
 


 



Pluralism in Corporate Form: Corporate Law and Benefit Corporations


Lyman Johnson


Washington and Lee University - School of Law; University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

2012

25 Regent University Law Review 269 (2013)
U of St. Thomas Legal Studies Research Paper No. 12-39
Washington & Lee Legal Studies Paper No. 2012-38

Abstract:     
Shortcomings in contemporary corporate law and theory are usefully illuminated through the new corporate form known as a benefit or “B” Corporation. For example, deep confusion persists within traditional corporate law over the relationship of three core concepts – fiduciary duties, corporate purpose, and the corporation’s best interests. Conceptually, benefit corporations – which combine profit making (not maximizing) with a social purpose – move from a strict shareholder-centric toward a stakeholder-centric model of corporateness, but they still fail to advance a truly new “corporate,” mission-centric model and theory of corporateness. Instead, reflecting doctrinal and theory failures in corporate law generally, they embody an alloy of shareholder and stakeholder elements. This is true at the organizational level and the individual level of theory, with continuing failure to move beyond an individualistic, self-interested anthropology of business participants to one featuring pursuit of the larger common good.

Still, benefit corporations offer great potential. They usefully disrupt the current business landscape, and thus it is premature to conclude they will not play an important role, both culturally and intellectually. Benefit corporations closely resemble certain early American corporations that largely were formed to advance public-serving purposes, not just private gain, and thus, historically, they represent a return to early practices as well as a seeming ultra-modern innovation in corporate form. And they exemplify the growing phenomenon of institutional pluralism, in which a diverse array of organizations serves to mediate between the individual and the state, and to advance a variety of social goals, but without statist control. This pluralism is serving to overcome longstanding and overly stark dichotomies that simplistically categorize corporate activity (and actors) as either profit or nonprofit, and as either public or private. All in all, B Corps offer both a useful perspective on traditional corporate law and represent a potential breakthrough form for business activity, further diversifying the business law ecosystem.

Number of Pages in PDF File: 30

Keywords: corporations, corporate law, benefit corporations, B Corporation

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Date posted: November 16, 2012 ; Last revised: April 18, 2013

Suggested Citation

Johnson, Lyman, Pluralism in Corporate Form: Corporate Law and Benefit Corporations (2012). 25 Regent University Law Review 269 (2013); U of St. Thomas Legal Studies Research Paper No. 12-39; Washington & Lee Legal Studies Paper No. 2012-38. Available at SSRN: http://ssrn.com/abstract=2177049

Contact Information

Lyman P. Q. Johnson (Contact Author)
Washington and Lee University - School of Law ( email )
Lexington, VA 24450
United States
540-458-8515 (Phone)
540-458-8488 (Fax)
University of St. Thomas, St. Paul/Minneapolis, MN - School of Law
MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

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