Introduction and Overview

Abstract

This manuscript is the first chapter from a law school casebook in the Aspen Casebook Series. The casebook, Business Associations: A Systems Approach, is scheduled for publication on September 15, 2020. The book is grounded in the understanding that corporations, partnerships, LLCs, and limited partnerships are fundamentally the same. That is, with only minor exceptions, all can serve the same purposes, and each requires performance of essentially the same functions. Entity laws contain few rules that cannot be changed by provisions in the entities’ fundamental documents.

As a result, “entity” is the book’s principal concept. The book is organized by the functions performed in each entity: financing; limiting liability; investor decision making; manager decision making; investor litigation; investment transfer; and entity merging, splitting, converting, and changing jurisdictions. (The book also covers the role of entities in society.). As each function is discussed, the differences among entity types are explained. Those difference are remarkably few. As a result, the book’s organization is more efficient than the organization of casebooks that treat each entity type as something entirely new and different. More subjects are covered in fewer pages.

This chapter introduces business associations as a subject, summarizes the governing law, and introduces the terminology already used by judges and commentators to discuss entities without regard to entity type. The terms include “investors” to mean shareholders, members, or partners; “shares” to mean stock, shares, interests, units, or partnerships; and “fundamental documents” to mean partnership agreements; certificates of organizations and operating agreements; or articles of incorporation, certificates of incorporation, and bylaws. The summary in this chapter makes it possible for the remaining chapters to be covered in any order (modularity).

The chapter also demonstrates the book’s overall pedagogical approach: simple direct explanations of both the law and the relevant systems, followed by problems that enable students to test their understandings in realistic practice settings.