Reinier Kraakman

• Yale Law School
• Harvard University

This chapter analyzes ancient Rome’s law of business entities from the perspective of asset partitioning , the delimiting of creditor collection rights based on the distinction between business assets and personal assets. Asset partitioning, which is an essential legal attribute of modern business forms such as the partnership and the business corp...

The Supreme Court has looked to the rights of corporate shareholders in determining the rights of union members and non-members to control political spending, and vice versa. The Court sometimes assumes that if shareholders disapprove of corporate political expression, they can easily sell their shares or exercise control over corporate spending. T...

In this chapter we analyze ancient Rome’s law of business entities from the perspective of asset partitioning, by which we mean the delimiting of creditor collection rights based on the distinction between business assets and personal assets. Asset partitioning, which is an essential legal attribute of modern business forms such as the partnership...

This paper examines common arrangements for separating control from cash flow rights: stock pyramids, cross-ownership structures, and dual class equity structures. We describe the ways in which such arrangements enable a controlling shareholder or group to maintain a complete lock on the control of a company while holding less than a majority of th...

How should the law structure the responsibility of corporations for the crimes and intentional torts of their managers and other employees? This question has received too little attention despite its intrinsic importance. Under both criminal and civil law, a firm is directly and vicariously liable for wrongs committed by its agents (managers and ot...

In this chapter we reflect on our paper ‘The End of History for Corporate Law’ (Hansmann and Kraakman, 2001), originally written for a conference at Columbia University in 1997 on a question that was then just beginning to attract substantial attention: ‘Are corporate governance systems converging?’ There can of course be as many answers to that qu...

Vicarious liability is the strict liability of a principal for the misconduct of her agent. This chapter reviews six areas of commentary on vicarious and corporate civil liability. It begins by formulating the standard case for vicarious liability based on the likely insolvency of the firm's culpable agents in the face of massive liability for busi...

Our essay on The End of History for Corporate Law was originally written for a conference at Columbia University in 1997 that was organized to address a question that was then just beginning to attract substantial attention: “Are Corporate Governance Systems Converging?” There can of course be as many answers to that question as there are interpret...

The centrality of the CEO is reflected in the empirical literature linking CEO turnover to poor firm performance. However, less is known about the institutional and personal correlates of CEO turnover. In this study, we find two CEO characteristics interact with turnover: tenure and ownership. We interpret our results as indicating that CEOs of S&P...

This article is the first chapter of the second edition of The Anatomy of Corporate Law: A Comparative and Functional Approach, by Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda and Edward Rock (Oxford University Press, 2009). The book as a whole provides a functional analysis of c...

This article is the second chapter of the second edition of "The Anatomy of Corporate Law: A Comparative and Functional Approach," by Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda and Edward Rock (Oxford University Press 2009). The book as a whole provides a functional analysis of...

This is the long-awaited second edition of this highly regarded comparative overview of corporate law. This edition has been comprehensively updated to reflect profound changes in corporate law. It now includes consideration of additional matters such as the highly topical issue of enforcement in corporate law, and explores the continued convergenc...

This article is the first chapter of the second edition of The Anatomy of Corporate Law: A Comparative and Functional Approach, by Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda and Edward Rock (Oxford University Press, 2009). The book as a whole provides a functional analysis of c...

While they often rely on the threat of penalties to produce deterrence, legal systems rarely use the promise of rewards. In this Paper, we consider the use of rewards to motivate director vigilance. Measures to enhance director liability are commonly perceived to be too costly. We, however, demonstrate that properly designed reward regimes could ma...

Summarizing the many thoughtful papers presented at this conference is a difficult task for an outside observer of European law reform. In lieu of bad comments on good papers, I offer instead my own observations on several of the conference's principal themes.

The many legal forms for business organisations that first appeared in the United States during the last thirty years – the limited liability company (LLC), the limited liability partnership (LLP), the limited liability limited partnership (LLLP) and the statutory business trust – all combine the pattern of creditors' rights, or asset partitioning,...

This article was written for a symposium on the occasion of the 25th anniversary of Martin Lipton's 1979 article, Takeover Bids in the Target's Boardroom. In our view, Takeover Bids is a Burkean take on a messy Schumpeterian world that, during 1980s, reached its apex in Drexel Burnham's democratization of finance through the junk bond market. But t...

The many legal forms for business organizations that first appeared in the U.S. during the last thirty years - the Limited Liability Company (LLC), the Limited Liability Partnership (LLP), the Limited Liability Limited Partnership (LLLP), and the statutory Business Trust - all combine the pattern of creditors' rights, or asset partitioning, that is...

Two decades ago, the Virginia Law Review published our article "The Mechanisms of Market Efficiency" (MOME), in which we tried to discern the institutional underpinnings of financial market efficiency. We concluded that the level of market efficiency with respect to a particular fact depends on which of several market mechanisms - universally infor...

Organizational law empowers firms to hold assets and enter contracts as entities that are legally distinct from their owners and managers. Legal scholars and economists have commented extensively on one form of this partitioning between firms and owners: namely, the rule of limited liability that insulates firm owners from business debts. But a les...

This article is the second chapter of a book authored by R. Kraakman, P. Davies, H. Hansmann, G. Hertig, K. Hopt, H. Kanda, and E. Rock, "The Anatomy of Corporate Law: A Comparative and Functional Approach," (Oxford University Press 2004). The book as a whole provides a functional analysis of corporate (or company) law in Europe, the U.S., and Japa...

This article is the first chapter of "The Anatomy of Corporate Law: A Comparative and Functional Approach." The book as a whole provides a functional analysis of corporate (or company) law in Europe, the U.S., and Japan. Its organization reflects the structure of corporate law across all jurisdictions, while individual chapters explore the diversit...

Corporate governance is on the reform agenda all over the world. How will global economic integration affect the different systems of corporate ownership and governance? Is the Anglo-American model of shareholder capitalism destined to become the template for a converging global corporate governance standard or will the differences persist? This re...

Twenty years ago we published a paper, "The Mechanisms of Market Efficiency," that sought to describe the institutional underpinnings of price formation in the securities market. Since that time, financial economics has moved forward on many fronts. The sub-discipline of behavioral finance has struggled to bring yet more descriptive realism to the...

It is easy sport to criticize the Delaware takeover cases as inconsistent with the empirical evidence, each other, and a sensible allocation of power between managers and shareholders. We in fact believe all of these things. Here, however, we offer a more sympathetic account of the core Delaware takeover cases. We argue that they reflect an often u...

The history of corporate law is an unfinished story of convergence in two parts. The more important part ended a hundred years ago, when the corporation displaced other entities as the principal legal form of large-scale enterprise in advanced jurisdictions. At the start of the nineteenth century, there were no general corporation statutes anywhere...

The law of every jurisdiction defines a set of well-recognized forms that property rights can take and restricts the creation of property rights that deviate from those forms. We argue that these restrictions serve not to standardize rights as others have argued but rather to aid verification of the ownership of rights offered for conveyance. We ex...

This book is the Russian language version of our treatise on the Russian Law on Joint Stock Companies, which we participated in drafting. You can download either the entire book at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=246670 or one or more of its parts. It contains three parts: (1) a general overview of the theory (a "self enforcing m...

This book is the Russian language version of our treatise on the Russian Law on Joint Stock Companies, which we participated in drafting. You can download either the entire book (click on the download document button below), or one or more of its parts. It contains three parts: (1) a general overview of the theory (a "self enforcing model of corpor...

This book focuses upon the processes by which new business organization forms have developed in the US, UK, and continental Europe. Part I addresses the theoretical developments in partnership and close corporation law. In Part II, the contributors offer insights into the forces shaping the evolution of partnership-type business forms in the US, UK...

Despite the apparent divergence in institutions of governance, share ownership, capital markets, and business culture across developed economies, the basic law of the corporate form has already achieved a high degree of uniformity, and continued convergence is likely. A principal reason for convergence is a widespread normative consensus that corpo...

Abstract Organizational law } comprising,the bodies of law that govern,standard,legal entities such as business corporations, partnerships, cooperatives, nonpro"t organizations, trusts, limited liability companies, and marriages } serves many functions of an essential- ly contractual,character. These contractual,functions,} which,include most,matte...

In Russia and elsewhere, proponents of rapid, mass privatization of stateowned enterprises (ourselves among them) hoped that the profit incentives unleashed by privatization would soon revive faltering, centrally planned economies. The revival didn?t happen. We offer here some partial explanations. First, rapid mass privatization is likely to lead...

This paper develops a "self-enforcing" approach to drafting corporate law for emerging capitalist economies, based on a case study: a model statute that we helped to develop for the Russian Federation, which formed the basis for the recently adopted Russian law on joint-stock companies. The paper describes the contextual features of emerging econom...

In this Article, Professors Hansmann and Kraakman present a comprehensive case for imposing pro rata liability on shareholders for tort damages that exceed the value of a corporation's net assets. Unlimited liability, they argue, would mitigate the current regime's incentives to overinvest in hazardous industries and to underinvest in precautions....

This article traces the origins of the proportionality test and explores the analytical questions that are central to evaluating the substance of the test. The article concludes by describing how key elements of the test can effectively screen a target management's claim of shareholder coercion by an underpriced offer.

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Thesis (A.B., Honors)--Harvard University, 1971.