Limits to Corporate Reform and Alternative Legal Structures
Company Law and Sustainability: Legal Barriers and Opportunities, Beate Sjåfjell and Benjamin Richardson, eds. (Cambridge University Press, 2015).
41 Pages Posted: 22 Sep 2015 Last revised: 19 Jun 2018
Date Written: September 21, 2015
This Chapter investigates innovative new corporate legal models that are developing to supplement the pathway to corporate reform. The majority of the Chapter explores a new generation of corporate hybrid alternatives that have appeared within the last decade in the United Kingdom, Canada, and the United States, specifically the Community Interest Company, the Community Contribution Company, the Low-Profit Limited Liability Company, the B Corporation (privately regulated), and the Benefit Corporation. These hybrids embody governance features that are attempting to support the space between the for-profit and non-profit arenas. The reasons behind particular hybrid features are examined, as well as some main challenges these models face, and the potential upside.
Hybrids are beginning to play a seminal role in challenging the mainstream model and forcing legislators to contemplate the legal limitations within that model. The next few decades will be very telling as to the success of hybrid legal structures, and whether they gain any traction in corporate practice. Further research and analysis, particularly economic analysis, may spell the difference between the success and failure of hybrids in the pursuit of long-term sustainable development.
Keywords: shareholder primacy, corporate law, corporate governance, path dependence, co-operative ownership, community interest company, low profit limited liability company, B Corporation, benefit corporation, community contribution company, United Kingdom, United States, Canada
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