Imagining Business Associations Without Agency Law
Transactions: The Tennessee Journal of Business Law, Vol. 11, No. 1, p. 77, 2009
9 Pages Posted: 30 Mar 2010
Date Written: November 20, 2009
The application of agency law to business associations presents a variety of problems. This essay considers an alternative conception of the business association that does not incorporate agency law principles. Borrowing from early ideas of partnership, this alternative conceives of the organization as a pool of assets. The asset pool is the bearer of liabilities; the shareholders and managers have powers and rights relating to the asset pool and to each other. This essay then considers how the law would differ under an asset-pool approach and identifies the potential benefits and disadvantages of the asset-pool conception of business entities.
Keywords: corporations, business associations, business organizations, partnership, agency law
JEL Classification: G34, K22
Suggested Citation: Suggested Citation