National Corporate Law in a Globalised Market

National Corporate Law in a Globalised Market

The UK Experience in Perspective

Corporations, Globalisation and the Law series

David Milman

In this timely book, David Milman considers how UK corporate law has been affected by the forces of globalisation, arguing that this is not a new development, but rather is part of an historical continuum. He examines corporate law regulatory strategy in general, treatment of foreign shareholders and multinational groups, aspects of private international law and issues connected with cross border insolvency.

Chapter 3: Commonality of fundamental principles

David Milman

Subjects: law - academic, company and insolvency law, private international law


1 INTRODUCTION We saw in Chapter 2 that all corporate law regimes seek to achieve certain basic policy goals. It is hardly surprising, therefore, to find that all systems of corporate law have a common core of substantive rules directed towards the attainment of those same broad objectives. In the first chapter in their edited work The Anatomy of Corporate Law, Henry Hansmann and Reinier Kraakman observe that, notwithstanding inevitable cultural differences in corporate law, ‘the underlying uniformity of the corporate form is at least as impressive’.1 They continue on the same tack, thus: ‘Business corporations have a fundamentally similar set of legal characteristics – and face a fundamentally similar set of legal problems – in all jurisdictions.’2 They identify five common features of any corporate system in another paper.3 The effect of this homogeneity from the perspective of English law is that there is now limited scope for cross-fertilisation of radically new ideas from other corporate systems. A law of diminishing returns is in operation. But possibilities do exist for subtle modifications in the common core. Before examining the potential for change we must ask ourselves the question: ‘What are these common core principles?’ 2 THE COMPANY AS A SEPARATE ENTITY If ever there was a universal principle of corporate law, it is the concept that a company is to be regarded as a separate entity with its own distinct rights and obligations. This is a sine qua non of any corporate law model. This principle, 1 2 3 (2004)...

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