The Important Role of Non-Organization Law

43 Pages Posted: 17 May 2005

See all articles by Larry E. Ribstein

Larry E. Ribstein

University of Illinois College of Law (deceased); PERC - Property and Environment Research Center

Abstract

The proliferation of partnership-based business organizations raises questions concerning the law's role in shaping firms. Although many scholars have focused on business organization statutes, at least in the U.S. this law may be trivial in the sense that it simply reflects underlying business concerns. That is because firms easily can choose the applicable governance law, and therefore can avoid bad or unsuitable laws. I show that non-organization law may have a greater effect than organization law on the structure of firms because firms cannot easily avoid this law. Federal and state non-organization laws might significantly reduce the usefulness of business organization standard forms where transaction cost and legal considerations conflict. The efficiency of non-organization laws therefore depends on whether their interference with organization law can be reduced without unduly compromising their policy goals.

Suggested Citation

Ribstein, Larry Edward, The Important Role of Non-Organization Law. Wake Forest Law Review, Vol. 40, p. 751, 2005; U Illinois Law & Economics Research Paper No. LE05-014. Available at SSRN: https://ssrn.com/abstract=725083

Larry Edward Ribstein (Contact Author)

University of Illinois College of Law (deceased)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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