A Rule-Based Method for Comparing Corporate Laws

Abstract

This Article proposes and describes operationally a rule-based method for comparing corporate or other entity laws. The method consists of six steps. The first step is to create a hypothetical fact scenario that raises the aspect of corporate law that is of interest to the researchers. The second step is to choose two comparable entity types for comparison. The third step is to conduct the research necessary to resolve the scenario under the law applicable to each entity type, in essentially the same manner that an attorney would if tasked with rendering an opinion. The fourth step is to extract from that research the rules — whether legal, practical, or something else — that directly determined the resolution, express those rules in parallel to the extent practical, and juxtapose them. The fifth step is to express the most important respects in which the laws are the same or different. The sixth step is to apply the researchers’ evaluative criteria to reach useful conclusions. Because the method is efficient, flexible, and easy to use, it can be applied by corporate law scholars, legal reformers, judges, and policy-makers to compare specific aspects of corporate law between two jurisdictions, by corporate lawyers to choose entity types internationally or domestically, and by corporate litigators to anticipate the effect of the court’s choice of law.

Keywords: corporation, comparative law, Delaware, United Kingdom, business judgment rule, comparative method, methodology