Corporate Theory (LAW228H1F)

This seminar offers an advanced exploration of corporate law, with a particular focus on the conceptual foundations and normative justifications of the modern corporation—especially the public company. The course examines the principal theoretical frameworks of the corporate form, including both contractarianism and institutionalist perspectives, and assesses how these approaches situate the corporation within the various markets in which it operates (product, capital, labor, and control markets). 

We will also address one of the core features of the corporate form: limited liability. This issue will be analyzed not only from an economic perspective but also through the lens of normative ethics, raising foundational questions about responsibility and risk allocation. 

Special attention will be given to corporate governance structures, with a focus on economic analysis of law. Competing models of governance will be considered alongside the empirical evidence supporting them. 

The seminar will further explore the regulatory strategies of corporate law. In particular, we will consider whether regulation should proceed through mandatory rules or default rules, through rules narrowly defined or legal standards, and—most crucially—whether regulation should adopt substantive rules that permit review of the merits of corporate transactions, or instead focus on process-based rules that evaluate only the procedures by which such transactions are approved.