Queen's Law Journal, Vol. 37, p. 39, 2011
33 Pages Posted: 23 Aug 2011 Last revised: 10 Jan 2013
Date Written: August 22, 2011
Some jurisdictions specify that the local liability exposure of a foreign legal form is defined by the liability configuration fashioned for that form by the foreign state. That blind displacement of local regulation has never been credibly justified. The regulation of risk within a jurisdiction is distorted or enfeebled when the formulation of local accountability is ceded to foreign authorities. A general rule of deference to foreign liability rules potentially subjects local competitors to uneven competition and the local population to increased levels of risk. A general rule of local dominance is preferable, even where the asymmetry of a foreign liability rule has a genuine policy justification in the foreign state.
Keywords: immunity shopping, jurisdiction shopping, comity, internal affairs, liability shield, unanimous shareholder agreement, nonprofit corporation, pseudo-foreign, foreign dominance, local dominance
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