Business Associations (LAW-611-001)
There are no notices at this time.
In this course we will analyze the allocation of authority, responsibility, and liability between agents and their principals, and among the owners and managers of partnerships; of limited liability companies; and of corporations. The Multistate Essay Examination, and the state-specific components of some states’ bar examinations, include questions on these areas.
Our study begins with the basic principles of agency law, which not only connect the themes of several first-year courses but also underlie the laws of every form of business association.
Our next major topic is the evolution of, and differences among the management powers and liabilities of partners in, different forms of partnerships (general, limited, and limited liability partnerships).
After reviewing the structure and features of limited liability companies, we turn for the rest of the semester to the law of corporations. The practical elements of (and professional responsibility issues raised by) forming, operating, and dissolving corporations lead us to examine in detail the relative rights, roles, and responsibilities of corporate shareholders, directors, and officers, and their ongoing conflicts over their respective powers of “corporate governance.”
Of special concern are the ever-growing bodies of caselaw, and of corporate document provisions and drafting techniques, concerning:
• directors’ and officers’ duties of due care, loyalty, and good faith;
• the processes by which directors and officers should make and document decisions;
• the fundamental rule, and other protections (indemnification; exculpation; and insurance), that often (but not always) insulate them from personal liability, even if their decisions result in significant financial losses to the corporation;
• the procedures and arguments by which shareholders can nonetheless attempt to hold directors and officers personally liable for having made irrational, negligent, and/or disloyal decisions; and
• the extent to which corporate directors can and should take into account the interests of such non-shareholder “stakeholders” as employees; customers; and neighbors of the company’s operations or facilities.
The practical drafting, operational, and policy issues that we analyze have direct practical applications to:
• employees of and partners in law and other partnerships;
• counsel to partners or partnerships;
• lawyers advising corporate shareholders, stakeholders, officers, individual directors, committees of directors, or entire boards of directors;
• residents of, and board members of, condominiums or co-ops;
• anyone counseling, serving as, or planning to serve as, an executive of a for-profit entity, of a non-profit (including a religious or educational) entity, or of a “social enterprise” such as a benefit corporation, flexible purpose corporation, low-profit limited liability company (L3C), or “B Corporation”; and
• anyone investing, or considering investing, in a business association of any size.
The required books—a casebook, a statutory supplement, and (available at no charge online, through WCL) two Examples and Explanations books—will be augmented throughout the semester by supplements posted on the Web page for the course. Multiple copies of each of the books will be on reserve in the Pence Law Library for students who would prefer not to purchase their own.
The supplements will contain (often for “browsing only”): diagrams; newspaper and magazine articles; recently-issued opinions; model and actual corporate documents; checklists and other tools for drafting corporate documents; excerpts from law review articles; and other material to illustrate and illuminate the situations, statutes, caselaw, and documents with which we work.
Also included will be portions of the instructor’s own casebook on corporate governance (which is not a required book for this course, but copies of which will be on reserve in the library), including elements of the forthcoming third edition.
**Special attention will be devoted throughout the semester to specific methods of identifying, and optimizing one’s approach towards, career opportunities in business associations law (whether representing the entities, their owners, their managers, or their stakeholders, or enhancing one’s own candidacy to be a corporate director); and to resources for monitoring emerging issues in corporate governance.
The examination for the course will be in-class and open-book (restricted to materials assigned for the course), and in essay format. In our final class session of the semester we will review in detail approaches and answers to the most recent examination.
This course does not require any previous knowledge of, or experience in, business or business law. There are no course prerequisites to this course.
Textbooks and Other Materials
The textbook information on this page was provided by the instructor. Students should use this information when considering purchases from the AU Campus Store or other vendors. Students may check to determine if books are currently available for purchase online.
Our casebook will be Macey et al., The Law of Business Organizations (West- 13th ed. 2017), ISBN #9781634608138. Three copies of this book will also be available on closed reserve at the Pence Law Library, under call number KF1413 .H36 2017)
The statutory supplement is Cox & Eisenberg, Corporations and Other Business Organizations: Statutes, Rules, Materials, and Forms (Foundation- 2019 ed.), ISBN 9781642429312.
It will also be possible to use the 2018 edition, ISBN 9781640208308, on which Eisenberg is the lead editor. However, earlier editions will not contain the current versions of some of the model acts that we will be reviewing in detail.
We will use, for a clearer discussion of some of the material than might appear in the casebook, the following two books:
Kleinberger- Agency, Partnerships, and LLC=s: Examples and Explanations (Aspen [Wolters Kluwer] 5th ed. (2017)), ISBN 9781454850120 (two copies available on closed reserve, KF1345.Z9 K6 2017); and
Palmiter- Corporations: Examples and Explanations (Aspen [Wolters Kluwer] 8th ed. (2015)), ISBN 9781454850168 (two copies available on closed reserve, KF1414.85 P35 2015).
These two books will also be accessible in digital form, at no charge. After finding either in the Library’s online catalog, click on the “Available Online” link; or, from the WCL page on “Resources for Students,” select: Pence Library ➡Search Tools ➡ Databases and Web Sites ➡ W ➡Wolters Kluwer Online Study Aids Library.
Because the in-class final examination in this course will be given using Exam4, you will not be able to use your hard drive, any flash drive, or the Internet during the examination. You will be permitted to bring in and use—in addition to hard copies of your class notes, outlines, and any other material that you have written or participated in writing—physical copies of the books above, and/or printed copies or photocopies of any of the material in those books. (The Library will not have the books available to borrow during the examination.)
Material that supplements our readings in these books will be posted on the course page periodically during the semester. The supplements will contain (mostly for “browsing only”): diagrams; newspaper and magazine articles; recently-issued opinions; model and actual governance documents; checklists and other tools for drafting governance documents; excerpts from law review articles; and other material to illustrate and illuminate the situations, statutes, caselaw, and documents with which we work. You may use during the exam printed copies of any pages of the supplements, a complete hard copy set of which (distributed as they are issued) should be available from Mr. Walter Crawford in the Copy Center for about $30.
The first supplement and first reading assignment will be posted on the course Web page once it is activated.
For my personal recommendations for extracurricular (certainly not required) reading, see http://www.beyondcasebooks.com One good “beach read” that doesn’t appear on the list: Wall Street Journal reporter John Carreyrou’s nonfictional Bad Blood: Secrets and Lies in a Silicon Valley Startup (2018), which has a lot to say about corporate governance, compliance, and lawyering, in the context of the Theranos debacle.
One final point: there are still spaces available to enroll in (for a grade or to audit) my Bankruptcy and Creditors’ Rights course (Tuesdays and Thursdays, 10:30 – 11:50 a.m.), which will have a two-week take-home, open-book, single (non-hypothetical) question, 3,000-3,500- word essay exam. The course description appears on the registration page for that course.
First Class Readings
Not available at this time.