The Proprietary Foundations of Corporate Law

43 Pages Posted: 11 Feb 2005

See all articles by John Armour

John Armour

University of Oxford - Faculty of Law; University of Oxford - Said Business School; European Corporate Governance Institute (ECGI)

Michael J. Whincop

Griffith University - Griffith Law School

Multiple version iconThere are 2 versions of this paper

Date Written: 2004

Abstract

Recent work in both the theory of the firm and of corporate law has called into question the appropriateness of analysing corporate law as 'merely' a set of standard form contracts. This article develops these ideas by focusing on property law's role in underpinning corporate enterprise. Rights to control assets are a significant mechanism of governance in the firm. Practical circumstances dictate that such rights must be shared. Property law protects the rights of co-owners against each other's opportunistic attempts to grant entitlements to third parties. At the same time, it uses a range of strategies to minimise the costs such protection imposes on third parties. The choice of strategy significantly affects co-owners' freedom to customise their control-sharing arrangements. This theory is applied to give an account of the 'proprietary foundations' of corporate law, which has significant implications for the way in which the subject's functions are understood and evaluated.

Keywords: theory of corporate law, shared ownership, property rights

JEL Classification: D23, G34, K11, K22

Suggested Citation

Armour, John and Whincop, Michael J., The Proprietary Foundations of Corporate Law (2004). Available at SSRN: https://ssrn.com/abstract=665186 or http://dx.doi.org/10.2139/ssrn.665186

John Armour (Contact Author)

University of Oxford - Faculty of Law ( email )

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HOME PAGE: http://www.law.ox.ac.uk/people/john-armour

University of Oxford - Said Business School ( email )

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HOME PAGE: http://www.sbs.ox.ac.uk/about-us/people/john-armour

European Corporate Governance Institute (ECGI) ( email )

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Belgium

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

Michael J. Whincop

Griffith University - Griffith Law School ( email )

Nathan Campus, GU
Nathan 4111
Australia
+617 3875 6559 (Phone)
+617 3875 5599 (Fax)

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