A Primer on the Uncorporation

ECGI - Law Working Paper No. 198

Lex Research Topics in Corporate Law & Economics Working Paper No. 2013-1

34 Pages Posted: 15 Jan 2013 Last revised: 26 Mar 2013

See all articles by Joseph A. McCahery

Joseph A. McCahery

Tilburg University - School of Law; European Banking Center (EBC); Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)

Erik P. M. Vermeulen

Tilburg University - Department of Business Law; Signify (formerly known as Philips Lighting) - Legal Department; Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI); Kyushu University - Graduate School of Law

Priyanka Priydershini

Tilburg University, School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: March 2013

Abstract

More and more companies appear with strange abbreviations behind their business name. Consider Chrysler Group LLC (instead of Inc.) or LVMH Montres & Joaillerie France SAS. Some even speak about the 'endangered corporate form' and point to the rise of the uncorporation. This Primer examines how the uncorporation has evolved in the United States and, more recently, in other economies around the world. We find that the growth in non-listed business forms in Europe, Latin America and Asia have been shaped by a mixture of learning and professional advice arising from the company law review process, as well as the indirect influence of overseas business forms. We examine the main components of uncorporate business forms that are responsible for limiting transaction costs, curbing opportunism and creating organizational structures that are compatible with entrepreneurial expectations. We show the main differences between the partnership-type and corporate-type uncorporations, particularly the LLC in the United States (US-LLC), the SAS in France and Colombia, the LLP in United Kingdom (UK-LLP), Singapore (S-LLP), India (I-LLP) and Japan (Yugen Sekinin Jigyou Kumiai, J-LLP). We find that, given the pitfalls in the evolution of uncorporation laws, an international Model Act would be consistent with lower transaction and information costs and could help to encourage cooperation between firms situated in different jurisdictions.

Keywords: beneficial ownership, business courts, conflict resolution, corporate governance, FATF, hybrid business forms, LLC, LLP, model laws, non-listed companies, uncorporation

JEL Classification: K20, K22, K42, L22, L26, L51

Suggested Citation

McCahery, Joseph A. and Vermeulen, Erik P.M. and Priydershini, Priyanka, A Primer on the Uncorporation (March 2013). ECGI - Law Working Paper No. 198; Lex Research Topics in Corporate Law & Economics Working Paper No. 2013-1. Available at SSRN: https://ssrn.com/abstract=2200783 or http://dx.doi.org/10.2139/ssrn.2200783

Joseph A. McCahery

Tilburg University - School of Law; European Banking Center (EBC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands
+31-(0)13-466-2306 (Phone)
+31-(0)13-466-2323 (Fax)

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Erik P.M. Vermeulen (Contact Author)

Tilburg University - Department of Business Law ( email )

Signify (formerly known as Philips Lighting) - Legal Department ( email )

Amstelplein 2
Amsterdam
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Kyushu University - Graduate School of Law ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan

Priyanka Priydershini

Tilburg University, School of Law ( email )

Tilburg, 5000 LE
Netherlands

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