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Sociétés et Compagnies Class Notes
Richard Janda - Winter 2008 - Paul Klippenstein
I.
THE FORM AND THE FUNCTION OF CORPORATE LAW : CORPORATE LAW AS
THE CONSTITUTIONAL LAW OF MARKET ACTORS
January 9, 2008
A.
Quel est le rôle et la fonction du droit des compagnies?
Le premier texte explorent trois thèses possibles pour expliquer le fondement du droit
des compagniies : la thèse de la licence où concession, la thèse du contrat, et la thèse
de l’acte constitutionnel. Bottomley défend la troisième thèse. Hansmann et Kraakman
identifie les éléments de base du droit des compagnies.


Bottomley, "The Birds, The Beasts, and the Bat: Developing a Constitutionalist
Theory of Corporate Regulation"
Hansmann, and Kraakman, Reinier, “What is Corporate Law”
Stephen Bottomley, “The Birds, the Beasts, and the Bat: Developing a Constitutionalist
Theory of Corporate Regulation”
Review: the discussion on the relation between the constitution as creating a corporate
body and the constitution as regulating the internal aspects. I think this starts on p.12.
What justifications can be made for corporate regulation by the state?
(a) Concession Theory
The state grants to a company a license to operate, which amounts to a
delegation of power to act. Company status is a privilege. This theory in turn justifies
greater intervention on the part of the state (favours mandatory regulation).
Criticisms:
(i) empirical: when incorporation became an administrative registration process that was
relatively open to anyone (ie. when it became largely a private action), the Concession
theory lost much of its explanatory power.
(ii) private: private is better
(b) Contract Theory (Neo-Classical)
The company is formed by a contract between stakeholders: the company is the
nexus of contractual relationships. In this version, incorporation is mere record-keeping,
and intervention by the state is a priori less welcome (favours facilitative deregulation).
Criticisms: This does not adequately explain the extent to which the state does channel
people to use the corporate form.
Bottomly rejects both in favour of:
(c) Constitutional Theory (starts p.12)
The dichotomy between the two choices above is not particularly helpful: rather,
it is important to recognize that sometimes state intervention is necessary beyond
merely providing ‘default’ contractual terms, but that nevertheless within corporations
that individual choices and corporate decisions are made.
Therefore, at a minimum, certain mandatory standards will be set by the state.
Beyond that, it is difficult to draw precise lines of where the state can justifiably
intervene in a corporation’s constitution.
Quote: “The label ‘corporate constitutionalism’ carries a double meaning. First, it
reminds us that corporation operate within a constitutional setting in which the state has
responsibilities and powers. Secondly, at the same time it proposes that corporations
are themselves constitutional arrangements. To put it another way, a corporation is an
institution which, via its constitution, mediates public and private interests and values.”
Questions:
(1) Which theory best describes companies?
(2) So what? Does this change either the function or the legitimacy of companies?
Hansmann and Kraakman, “What is Corporate Law?”
What is corporate law? Nearly all jurisdictions have a basic corporate form with five
basic characteristics:
1) Legal personality (CCQ 298): the corporation has a distinct legal personality and
patrimony.
This separation has two components:
(i) the priority rule: creditors of the firm have a claim on the firm prior to any claims on
the firm owners’ personal assets.
(ii) liquidation protection: neither individual owners nor their creditors can withdraw
their share of the firm’s assets at will.
Legal entities that possess both of these characteristics, such as corporations, can be
said to possess “strong form” legal personality.
2) Limited responsibility of shareholders
Creditors of the firm have a claim only against the assets owned by the firm itself, not
against the assets of the firm’s individual owners.
3) Transferable ownership (shares)
Closely related to (1) and (2) in that changing ownership does not change the liability of
the other owners.
4) Management is delegated to the board of directors (conseil d’administration)
The board is:
- formally separate from the operational managers of the corporation: which
facilitates separation between on one hand, the initiation and execution of business
-
decisions, and on the other, the monitoring and ratification of decisions and the
hiring of the operational managers
formally distinct from the shareholders of the corporation
board is elected by the shareholders
composed of multiple members
5) Owners (investors) do not have control of the company.
‘Ownership’ is composed of (i) the right to control the firm, and (ii) the right to receive
the firm’s net earnings. Corporate law facilitates a model where both aspects are tied to
the amount of capital invested. (There are, however, different methods of dividing these
aspects.)
What is the goal of corporate law?
The broad goal is to serve the interests of society as a whole, or more particularly,
to advance the aggregate welfare of the corporation’s constituents (shareholders,
employees, suppliers, customers, communities, environment).
In their view, the argument that corporate law ought to be about maximizing shareholder
value is most appropriately interpreted as an argument that this is the best means of
achieving the broader goal of advancing overall welfare.
January 11, 2008
B.
Quel est le rapport entre le droit étatique et les règles internes de la
compagnie?
La compagnie à la fois reçoit et se donne une constitution. Ces lectures explorent le
rapport entre la constitution externe et interne de la compagnie. Roberta Romana
discute du marché qui se forme parmi les juridictions qui offre un certificat de
constitution comme « produit ». Armour et le commentaire sur la cause InspireArt
mettent à jour la caractérisation de Romano du droit européen.
 Romano, Roberta, The Genius of American Corporate Law, 6 (1993) The AEI
Press, Washington, D.C., 118
 Armour, John, “Who Should Make Corporate Law: EC Legislation v. Regulatory
Competition” ESRC Centre for Business Research Working Paper 2005.
 Case Comment: Kamer Van Koophandel En Fabrieken Voor Amsterdam v.
Inspire Art Ltd. (E.C.J. September 23, 2003) (2004/2005) 11 Col. J. Eur. L. 187.
“Regulatory arbitrage”: companies relocating their legal personality to another jurisdiction simply to benefit from a
regulatory difference there, rather than for any sound economic reasons. For Armour, this is a pre-condition to
regulatory competition.
lex societatis: the law governing a company’s internal affairs
Roberta Romano “The Genius of American Corporate Law”
State law should facilitate corporate activity: competition between states to
attract incorporation reduces the number of regulations to be bypassed, thus
creating favourable conditions for business.
Looks at studies by Daniels and Macintosh
2 thèses:
(1) Can the decline in US productivity be ascribed to its corporate laws?
No: the decline in US productivity should not be used as justification to import other
models into the US model. Rather, productivity is more affected by the traditional
factors (education, etc.).
(2) Competition to attract business could actually stimulate the economy. The genius of
the American system is to limit political obstacles (competition reduces the number of
laws that must be bypassed).
Regulation: what is proper extent of regulation?
One example would be laws that protect shareholders by giving the courts a role in
deciding whether managers fulfilled their obligations (! very interventionist). In practice,
managers benefit from the “business judgment” rule that permits a certain discretion to
managers, and helps maximize shareholder value.
However, Romano presumes a perfect match between what management seek for
themselves and that which will benefit shareholders: this may not be the case. (ex. in
securities law, Enron and other disasters may justify more intervention).
John Armour “Who Should Make Corporate Law? EC Legislation versus Regulatory
Competition”
Is regulatory competition between Member States a more desirable way to make EU
corporate law than is EC legislation?
Main arguments:
1) EU is moving towards framework where companies willing and able to locate
registered offices to obtain desirable corporate law
2) Some states (esp. UK) will have incentives to compete to attract companies to
incorporate under their laws.
3) Euro regulatory competition will result in a ‘race to the top’ (providing company laws
that enhance firm value) rather than a ‘race to the bottom’.
4) This argument can be extended to corporate insolvency law.
The “Delaware Effect”
What advantages does Delaware offer?
- developed body of case law (corporate governance and transaction liability)
- special court (Court of Chancery – equity) for trial of corporate matters. The quality
and expertise of this court are key factors
- laws favourable to corporations
- no income tax for corporations
What makes it possible?
- Pvt Int’l Law choice of law: certain matters governed by the place of incorporation
- states recognize incorporation in other states
This allows for regulatory competition between states: states can offer the ‘product’ of
incorporation in their state.
Reasons why Cdn regulatory competition is less effective than in US (from Romano):
(1) Provinces have less regulatory control over corporation codes:
- securities regulation (based on residence of investor) can override provincial
corporate law regime and regulate corporate governance
- SCC reviews all provincial decisions (although hasn’t reviewed many decisions in
corporate matters)
- Canadian judges are federal appointees with lifetime tenure
(2) Canadian corporations tend to have larger concentrations of ownership
- choice of legal regime declines in importance because less need to help settle
disputes.
LA THÉORIE DE L’ENTREPRISE : POURQUOI EXISTENT-ELLES ET POURQUOI
LE CLIVAGE ENTRE PROPRIÉTÉ ET LE CONTRÔLE?
II.
January 16, 2008
A.
Pourquoi les entreprises existent-elles du point de vue économique?
Le lauréat de Nobel Ronald Coase a écrit ce texte classique qui propose l’hypothèse
très largement acceptée que la minimisation des coûts de transactions expliquent
l’émergence de l’entriprise.
 Coase, R.H., "The Nature of the Firm" in The Firm the Market and the Law, 2
(1998) The University of Chicago Press, 33
R.H. Coase, The Nature of the Firm (1937)
Why do firms exist? That is, why not perform the same activities as a series of
individual contracts governed by the market? Coase attempts to explain the apparent
paradox between the economic assumption that resources are allocated by the price
mechanism with the assumption in other contexts that resources are allocated by an
entrepreneur/co-ordinator.
The answer is that there is a cost to market behaviour: the cost of finding out
information and conducting transactions. These costs are internalized by a firm, with
the result that they are performed more efficiently. For example, there are cost savings
when workers do not negotiate each unit of work, but rather obey an entrepreneur/coordinator within the limits of an employment contract.
What does Coase mean when he refers to the economy as “self-steering”?
He means that market activity will regulate itself based on the most efficient allocation of
resources: this is premised on rational and self-interested economic actors.
What do market transactions look like in the absence of firms?
In the absence of firms, market transaction consist of a series of contracts and subcontracts between individuals.
What is the price mechanism?
The idea that multiple market interactions will result in an optimally efficient price that
reflects supply and demand and thus motivates the allocation of resources.
What are the transaction costs associated with using the price mechanism in the
market?
Transaction costs are those associated with negotiating and concluding contracts: this
should include finding a qualified person to perform the desired prestations, agreeing to
the terms of the contract, and also the costs of ensuring performance of the contract.
What two types of coordinating mechanisms exist for organizing economic activity?
Price mechanism and entrepreneur-coordinators.
Why is it sometimes expensive to rely on the price mechanism for coordinating market
transactions?
Price mechanism incurs informational costs (finding out what is available and at what
price) and transactional costs (see above).
Can you explain in your own words the difference between production being directed by
the price mechanism and production being directed by entrepreneur-coordinators?
When production is directed by the price mechanism, each party to the production will
individually negotiate a contract to do that work: when it is directed by entrepreneurcoordinators, they create a contract usually for a period of time, during which the
entrepreneur directs a whole series of production decisions.
Why is the firm organizational form more likely to be adopted in transactions involving
long term contracts?
Does Coase contemplate practical limits on firm size? Are these limits reflected in
reality? Does a satisfactory explanation exist for any disrepency?
Practical limits contemplated by Coase include decreasing returns (that is, when internal
costs of organizing an internal transaction begin to be larger than the external
transaction costs); failure to make best use of production (lack of flexibility); waste of
resources; and “other advantages” that small firms have.
Coase’s economic theory of the firm is that it is profitable to establish a firm because
there is a cost to using the price mechanism. What is Knight’s alternative explanation
for the organization of firms?
Knight’s alternative explanation is the existence of uncertainty. The most importance
characteristics of social organization are (i) that goods are produced on the basis of
impersonal prediction of wants, and (ii) that the work of forecasting and predicting is
concentrated upon a narrow class of the producers.
Because of uncertainty, the confident – entrepreneurs – assume the risk and others
trade the guarantee of a fixed wage against a larger share of the results.
Which explanation do you find more compelling?
What are negative and positive externalities? How is the relative efficiency of the firm
over the price mechanism of the market affected by positive and negative externalities?
What factors other than transaction costs might make it cheaper to use the firm and
more costly to use the market?
No one theory explains all of human behaviour, not even economics. Do other, noneconomic explanations exist to explain the presence of firms?
January 18, 2008
B.
Quels sont les types différents de l’entreprise et quels sont leurs avantages
et désavantages?
 Klein, William A. and Coffee, John C. Jr., Business Organization and Finance –
Legal and Economic Principles, (1993) Westbury, New York, 5, 51
What form will the company take, and why?
Coase justifies the emergence of the firm, but says little about the form this organization
will take: why are there different forms of business associations?
Klein and Coffey, “Business Organization and Finance”
Sum: Important factors in choosing business form include limiting personal liability
and improving flexibility for raising capital.
This article seeks to explain economic incentives that push owners towards various
forms of ownership.
Sole Proprietorship
Sole owner. Does not necessarily maintain control- can hire a manager.
Adv: simple to create.
Disadv: No limited liability (with some exceptions, creditors can go after personal assets
as well, and personal creditors can go after business assets).
Disadv: Lack of flexibility with investment (can only raise capital through borrowing).
To limit liability, might procure non-recourse loans (where loan is secured by particular
asset, and loaner will not go after other assets).
General Partnership (société en nom collectif, 2198 & ss.):
Adv: More access to capital.
Disadv: No limited liability.
Limited Liability Partnership (Société en commandite, 2250 & ss.):
Adv: The liability of each partner is limited to his own negligence, cannot be responsible
for fault in the operation.
Adv: More access to capital.
Note: Coates: each of these organizations reduces transaction costs on the market.
First Exercise
Three clients negotiating a joint venture, find the legal form that is the most
advantageous.
1) Rough draft of a text on the elements of the transaction (each group responsible for a
certain number of elements).
2) See what other groups have prepared, make comments. This might already produce
an agreement.
Possible to spend two hours a day next week.
In negotiation: focus on disagreements. Delegate one person to discuss, give limited
time for limited objectives.
Distribute tasks from the beginning: negotiator, combining texts and editing.
Drafting Points:
- definitions: beginning, will operate throughout document
- headings!
- ambiguous business terms: can these be interpreted by a court, and if not, how can
they be rendered more precise (clearer categories? a process? an absolute rule?)
- vet scrupulously, esp. for consistency of terms (80% of time in editing)
January 23, 2008
C.

Qu’est-ce que la fiducie d’utilité privé?
J.A. Levin "Business Trust Financing and Restructuring in Canada: Key Banking
and Insolvency Issues" 63 Fasken Martineau DuMoulin March 21, 2005.

Dirk Zetzsche "The Need for Regulating Income Trusts: A Bubble Theory" 63
U.T. Fac. L. Rev. 45 (2005)
Levi, “Business Trust Financing and Restructuring in Canada”
Business trusts have become significant in Canada. Main attraction to investors: high
yields (no taxes on the ‘legal entity’, absence of retained earnings and minimal
reinvestment in plant and equipment), significant capital growth, tax deferral.
Legislation on bankruptcy and insolvency does not adequately deal with business trusts,
as business trusts do not fit into established categories. Consequently, there is little to
reconcile the fact that there are significant differences in the means creditors have to
recover in business trusts as compared to corporations.
Zetsche, “A Need to Regulate Business Trusts”
Income trusts seen as high return investment, guarantees payment to investors. Z
argues that marketing of business trusts over-hyped, created bubble market,
comparable to the dot-com bubble of 1999-2000, and makes policy recommendations
for avoiding the bubble.
Main “selling features” of business trusts are:
(i) debt security: the legal form of investment appears to have debt characteristics, but
in reality has the risk structure of equity.
(ii) tax advantages: there are tax advantages at the level of corporation. However,
many factors need to be taken into account to calculate whether an advantage truly
exists for the individual investor. Long term investment: if there is a tax advantage, not
good for long-term investment, as tax law is subject to abrupt changes (for ex. the
government may close the loophole to protect its own revenues.)
(iii) high cash returns: on the market, high and stable cash yields are not sustainable.
The real advantage is the structure of payouts.
(iv) aligned interests
(v) conservative investment
“In order to prevent the bubble from bursting, four steps need to be taken:
(i) avoiding tax incentives for investments in low-growth businesses;
(ii) structuring trust law to require governance controls equivalent to those mandated by
corporate law if the units are to be issued to the public, while restricting investments in
trust units that do not meet this condition to sophisticated investors;
(iii) empowering investors to decide upon the distribution policy of a trust;and
(iv) avoiding limitations of pension fund holdings in income trusts.
Furthermore, a strict approach in regulating broker-dealers' and mutual fund managers'
sale practices is apt to augment the aforementioned measures. Income trusts can
provide benefits to investors, to businesses, and to the economy in general, but only if
they develop with the support of some of the enabling and guiding mechanisms of wellfunctioning capital markets and sophisticated regulatory regimes.”
January 25, 2008
D.


Quel est le rapport entre propriété et contrôle au sein des entreprises?
Berle, Adolf A. and Means, Gardiner C., The Modern Corporation and Private
Property, 1-4 (1967) Harcourt, Brace & World, Inc., New York, 293
Bourdieu, Pierre, Les structures sociales de l’économie, (2000) Éditions du Seuil,
252
Berle & Means, “The Modern Corporation and Private Property”
What is now referred to as the Berle-Means principle refers to the idea that, given selfinterested individuals, the separation of ownership (or risk) and management (or
control) will cause problems in that owners and managers have different interests.
The article begins with the central question: who should get the profits of the
corporation?
The Legal Argument
The law has traditionally been concerned with protecting rights in property: therefore,
the profits should go to the owner. The managers, then, have a power “in trust” to be
used only to the owner’s benefit.
In practice, however, the law has struggled to limit the power of managers and make
them accountable to the owners. Berle-Means reject the legal argument.
The Economic Argument
Economics is interested in how to maximize wealth. Individual efforts to produce wealth
also produce social benefits: the goal becomes to maximize incentives to encourage
people to produce. Under this model, the profits of the corporation should go to the
managers (beyond the minimum return necessary to guarantee continued investment
by the owners). This kind of analysis is based on the ideas of Adam Smith about
private property, wealth, private entreprise, individual initiative, the profit motive, and
competition.
However, Adam Smith had in mind producer-owners of small entreprise: with the split
between risk and control, each of these concepts changes drastically. Berle-Means
reject the economic argument.
The Socio-Historical Argument
Today, the modern corporation is a concentration of (economic) power, analogous to
the historical domination in different time periods of the church (religious power) and the
state (political power). The more that power is concentrated, the greater the need for
regulation to ensure it is used for the broader social benefit. Even in capitalism, in
periods such as the Great Depression the industrialists were called upon to use their
wealth for the common good.
Berle-Means suggest that the owners, by putting others in charge, have relinquished the
claim to be the sole beneficiaries of the corporation. On the other hand, the managers
have not produced a compelling claim that only they should benefit from the
corporation.
Since neither the owners nor the managers have made a strong claim to deserving the
excess profits of the corporation, perhaps it is time to examine whether some claim can
be made for a broader distribution of profits that takes all stakeholders into account.
“The control groups have, rather, cleared the way for the claims of a group far wider
than either the owners or the control. They have placed the community in a position to
demand that the modern corporation serve not alone the owners or the control but all
society.”
B-M assert that the law is in a position where it is open to consider other interests: the
controllers, therefore, would become a type of technocrat adept at weighing the different
interests of the parties. B-M see that corporation law, in response to the social
dominance of the modern company, could become the new “constitutional law” of the
modern state.
(see especially pp. 310-312)
Questions:
How can owners’ and managers’ interests be reconciled?
Are the any economic means to control managers’ behaviour?
In talking about the form of the corporation, a key aspect for Berle-Means is the
separation of ownership and control. Underlying their analysis is the assumption that
people are essentially economically rational and act in their own best interest.
Bourdieu, “Les structures sociales de l’économie” (2000)
The assumption that people are rational economic actors is challenged by Bourdieu,
who undertakes a sociological analysis. He argues that understanding the corporation
as a rational economic actor is unrealistic. Instead, personal (non-economic) interests
and social interests are often factors: this results in power struggles that are not
explainable by economists.
For example, B observes a cement-producing company in which the long-term policy
decisions, rather than being the product of careful economic calculations, are actually
the product of a power struggle between different managers with a different conception
of what the business should be.
This complexifies the B-M thesis. Stepping out of economic self-interest as the sole
factor might actually lend support to the B-M conclusion: that is, the idea that more than
rational economic decisions are at play in the management and organization of a
corporation, it would make sense to look at more than merely economic variables in
deciding how to distribute the profits. This might suggest that including other
stakeholders in this equation.
Testy offers a progressive feminist critique of corporate law, in which she rejects the
current divisions of power and suggests judging the corporation using feminist values.
III.
L’ÉMERGENCE DE LA PERSONNALITE JURIDIQUE DE LA COMPAGNIE
January 30, 2008
A.
How do the emergence of and changes to the corporate form relate to
changes in economic relationships?
Harvard Law Dean Robert Clark’s oft-cited account of the four stages of capitalism is a
useful backdrop not only to the theme of corporate personality but ultimately to the
central problem of corporate governance which will be the main substantive theme of
the course. The readings on the Sarbanes-Oxley Act are meant to prompt the question
as to whether current developments in corporate law correspond to a “fifth” stage of
capitalism.
 Clark, Robert Charles, "The Four Stages of Capitalism: Reflections on
Investment Management Treatises" (1981) 94 Harvard Law Review 561
 Sukanya Pillay “Forcing Canada's Hand? The Effect of the SarbanesOxley Act on Canadian Corporate Governance Reform.” 30 Man. L.J.
285 2004
Discussion on first exercise:
Risk of the court finding a “contrat nommé”. How to send signals to the court to interpret this “contrat
nommé” in a way that is compatible with the will of the parties.
- Contract for sui generis co-entreprise is risky, but still valid. Bouchard: creates a residuary category out
of société en participation. But Janda says this is merely doctrine: the goal of the Code is to be hermetic.
- The Livre du Barreau goes in the opposite sense: does not use numerus clausus.
Formalist:
Janda: there are nominate contracts, and if not a nominate contract, it is a contract (will of the parties).
But, why create nominate contracts?
Are we trying to channel specific forms of entreprise? How to allow a form that is not within nominate
contracts?
In favour of new form: see what the market needs, and the law should respond, like for ex. the trust
(Romano). If we need to formalize this type of organization, we’ll do so.
Against: it is up to the legislator to create new forms.
Clark, "The Four Stages of Capitalism”
Market regulation.
Gap between control and ownership is increasing. Further, ownership goes through an
increasing number of intermediaries. Division: impact of capital. Dispersal of the
effects of business, concentration of control. Business effects more and more people,
but is less and less susceptible to control by those people.
For Clark, the history of capitalism can be organized into four distinct stages. They
overlap, but each stage is characterized by a distinct set of problems: the law responds
by employing appropriate regulatory strategies.
Stage 1: Entrepreneur (19th c.)
The promoter-investor-manager.
Institution: The rise of the corporation.
Law: incorporation statutes and enabling laws; antitrust legislation.
Corporations grow, need to expand: search for capital that will not control, results in the
split of ownership and control, and the professionalization of the control function:
Stage 2: Professional Business Manager
The split of ownership and control (recall Berle-Means).
Institution: Modern publicly-held corporation.
Law: develop stable relationships between owners and managers (give managers full
control, but still keep them accountable). Federal securities laws. Fiduciary
relationships.
But the separation of the decision to supply capital from the decision of what to do with
it gives rise to:
Stage 3: Professional Portfolio Manager
Institution: the institutional investor (financial intermediary). This stage is marked by
the increasing proportion of financial claims (stocks, bonds, etc.) against the ultimate
users being held by corporations. In this phase, note the importance of institutional
investors in capital markets.
Stage 4: Professional Savings Planner
The “future” for Clark, was a split in the capital provider into the savings manager and
the beneficiary. Increasing, the decision of what proportion to save is institutionalized
(in pension plans, for example).
Law: social security policy, subsidies to private employer benefits, etc.
Pillay “Forcing Canada’s Hand? The Effect of the Sarbanes-Oxley Act on Canadian
Corporate Governance Reform”
Following Enron and other corporate scandals, the US has introduced legislation (SOX)
designed to fix the failure to protect investors with a rules-based regime (see “Key
Provisions” for content). This regime applies extra-territorially in the sense that it
requires compliance of any company listing in the US.
The author questions whether the regime is appropriate for Canada, particularly given
key differences in Canadian corporate culture, including a smaller number of large
companies, a higher number of small companies, and a high proportion of companies
with controlling shareholders. While adopting the US rule-based approach may project
a tough image with investors, some argue that a principles-based approach would
provide a competitive advantage over the US, and prove more beneficial to Canada in
the long run.
Twelve of thirteen Canadian jurisdictions have essentially adopted the US approach, the
lone standout being British Columbia. Doing so, SOX influenced Canada to shift focus
to a rules-based approach.
It seems clear that SOX, by applying beyond the US, affects the sovereignty of other
countries to decide how to regulate their securities markets. It has had positive effects
in Canada: namely that Canada has had to resolve the issue of whether to harmonize
within the country (12 of 13 have been solidary in adopting US approach). However,
throwing its hat in with its southern neighbour may prove risky if the US marketplace
does not continue to be viable.
February 1
B.
What, in comparative perspective, are the historical underpinnings of
corporate legal personality and limited liability?
This rather elaborate set of readings should be approached with a light touch – feel free
to skim. You are given here an overlapping and comparative set of historical accounts
discussing the emergence of legal recognition for corporate legal personality and limited
liability in civil law and common law jurisdictions.
 Lefebvre-Teillard, Anne, Introduction historique au droit des personnes et de la
famille, 2 (1996) Presses universitaire de France, 87
 Pratte, Caroline, “Essai sur le rapport entre la société actions et ses dirigeants
dans le cadre du Code civil du Québec” (1994) 39 McGill L.J. 1
IV. AGENCY, FIDUCIARY RELATIONS AND THE CORPORATION: THE
DEPLOYMENT, ORGANIZATION AND REINFORCEMENT OF TRUST
February 8
A.
What is the role of fiduciary relationships within the corporation?
Fiduciary duties dominate the legal landscape of the corporation. Much corporate law
doctrine has to do with the duties of directors, managers and controlling shareholders
and with the rights of shareholders, especially minority shareholders. These readings
address why this is so, especially from an economic perspective.
 Frankel, Tamar, "Fiduciary Law" 71 (1983) California La Review, no. 3, 795
 Easterbrook, Frank H. and Fischel, Daniel R., The Economic Structure of
Corporate Law, 4 (1991) Harvard University Press, 90
Rupture in the corporation between ownership and control.
Fiduciary relationships are difficult to reconcile with CVL.
Tamar Frankel “Fiduciary Law”
Interdependence, we are in a fiduciary era, more than contractual.
Maine “From Status to Contract”
Transformation in legal relationships from feudal to liberal periods. Whereas
relationships were formerly based on (non-negotiated) social status, modern times
privilege negotiated expressions of the will. Frankelf proposes that the contract has
now given way to the trust as the most important structure.
In fiduciary relationships there is an element of vulnerability: the beneficiary is not in
control and is necessarily vulnerable (further, almost everyone who has contributed to a
fund of any type is a shareholder, and therefore vulnerable in the sense that the control
over their money is delegated to someone else).
Specialisation of labour creates interdependence, and therefore vulnerability.
February 13, 2008
B.
How does the law protect corporate fiduciary obligations?
These readings address liability for breach of corporate fiduciary duties in an attempt to
assess how and why the law should protect trust within the firm and generated by the
firm.
 Kraakman, Reinier H. "The Economic Functions of Corporate Liability" in
Corporate Governance and Directors' Liabilities (K. Hopt & G. Teubner eds.,
Walter de Gruyter, 1985) p. 178
 Teubner, Gunther, "Corporate Fiduciary Duties and their Beneficiaries – A
Functional Approach to the Legal Institutionalization of Corporate Responsibility",
149
 Peoples Department Stores Inc. (Trustee of) v. Wise, [2004] 3 S.C.R. 461
Peoples Department Store v. Wise, [2004] 3 S.C.R. 461
F: Peoples, a subsidiary of Marks & Spencer, is sold to Wise. Because Wise cannot
pay the full purchase price immediately, M&S secures the debt against Peoples’ assets,
and imposed conditions including that the two companies keep distinct financial ratios,
and that Peoples not help out Wise financially.
In an attempt to address the financial difficulties of both companies, the directors create
a scheme to consolidate suppliers whereby Peoples orders for both stores from all
North American suppliers, and Wise will reimburse. Since over 80% of both stores’
inventory is from North America, Wise soon builds up significant debts to Peoples.
Meanwhile, due to poor performance by Peoples, M&S gets nervous and takes an
action in bankruptcy against Peoples to recover their assets. Peoples goes bankrupt,
and M&S, TD Bank, and the landlord get (most) of their money. The big losers are the
companies who extended trade credit to Peoples.
The trustee in bankruptcy for Peoples sues the directors of Wise for breach of fiduciary
duty towards Peoples’ creditors.
Q: Do directors of a corporation owe a fiduciary duty to the creditors of that corporation,
comparable to their (statutory) duty to the corporation itself?
D: Directors owe duty of care to creditors, but that duty does not rise to a fiduciary duty.
R:
The trial judge held that the fiduciary duty and the duty of care under s. 122(1) of the
CBCA extend to a company’s creditors when a company is insolvent or in the vicinity of
insolvency, that the Wise brothers had violated this duty and were therefore liable.
CA overturned on appeal.
Duties of managers
Section 122(1) of the CBCA establishes two distinct duties to be
discharged by directors and officers in managing, or supervising the management of,
the corporation:
(a) act honestly and in good faith with a view to the best interests of
the corporation; and (“statutory fiduciary duty”)
(b) exercise the care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances (duty of care).
Fiduciary duty refers to the idea that managers use their delegated powers and the
corporation’s resources in ways that are consistent with the interests of the corporation.
What is the content of this obligation?
- in some cases, directors not allowed to profit as a result of their position, even though
not at expense of the corporation.
In this case, the absence of fraud or dishonesty on the part of the Wise brothers stands
in the way of a finding of breach of fiduciary duty.
To whom is this obligation owed?
The obligation is due to the corporation. but to whom does this extend?
Broader than merely shareholders. Although cannot completely disregard
shareholders’ interest, other considerations (employees, community) are also in the
interests of the company (Teck).
The obligation towards the company des not change when the corporation is in the
“vicinity of insolvency”. Good faith efforts to promote the company’s health are
consistent with the obligation, even when they are unsuccessful (46).
There are other mechanisms available to creditors (“oppression remedies” at ss. 138,
141 CBCA; duty of care) to protect against abuse by directors. These make it less
necessary to extend fiduciary duty to creditors.
Rather, interpreting the duty of care as applying to creditors is consistent with 1457.
In this case, there was no breach of duty of care.
February 15, 2008
C.
For what range of stakeholders are corporate fiduciary obligations
recognized and protected?
Informed by public choice theory, Macey and Miller take a critical approach to the
extension of corporate liability to a broad range of "stakeholders" You should consider
their views critically and imagine what the counter-arguments are in support of
expansive protection of stakeholders.
 Macey, Jonathan R. and Miller, Geoffrey P., "Corporate Stakeholders: A
Contractual Perspective", (1993) 43 University of Toronto Law Journal 401
 Rogene A. Buchholz and Sandra B. Rosenthal Toward a Contemporary
Conceptual Framework for Stakeholder Theory. Journal of Business Ethics.
Volume 58, Number 1 May 2005
V.
CORPORATE GOVERNANCE: ECONOMICS, MANAGEMENT AND
COMPARATIVE LAW PERSPECTIVES ON THE LEGITIMATION OF POWER IN THE
CORPORATION
February 20, 2008
A.
What is the relationship between corporate fiduciary obligations and
corporate governance?
Jensen and Meckling discuss how firm ownership structure and firm governance should
respond to the problem of agency costs, which in turn is linked to fiduciary responsibility
in the firm.
 Jensen, Michael C. and Meckling, William H., "Theory of the Firm: Managerial
Behaviour, Agency Costs and Ownership Structure" in Posner,
Jensen and Meckling, “Theory of the Firm: Managerial Behaviour, Agency Costs and
Ownership Structure”
Nexus of Contracts
A company is made up of multitude of actors, or agents; “existence of residual claims”
refers to the fact that shareholders are co-contractants among others, but they are
the ones whose rights come after the other co-contractants.
However, shareholders’ part of the contract is transferable, alienable on the market.
Compare J&M with Macey & Miller.
This view allows seeing the individual interests present within the entreprise, and avoids
the difficulty of seeing the firm as an entity (this is just a legal fiction).
This is a realist vision clearly oriented towards maximizing the value of the firm.
Entity Theory
This is one of the main arguments J&M are arguing against: that there is an entity with
different individuals having a different stake in the entreprise. J&M avoiding this type of
analysis.
Note that M&M adopt a similar approach, with a view to arguing that s.h. most need the
protections offered by fiduciary duties (applying the argument that efficiency is highest
value to the allocation of fiduciary duties).
J&M v. Coase:
Recall Coase the firm is something that tries to avoid the market costs; J&M see market
transaction costs within the firm.
Social responsibility:
The conception of nexus of contracts helps avoid social responsibility: difficult to assign
social responsibility without an entity to which it attaches.
Consequences of J&M:
Goal of company law is to organize to manage agents. Way to manage agents is to
focus laws on s.h., and their recourses against the management. As soon as we aim to
do more with company law, we step outside of J&M.
Importance of the problem of agency costs.
Argument that we do not think of markets as having personality perhaps bear reexamination – one can still describe the aggregate tendencies of the actors, or the
aggregate of the irrationalities. J&M nevertheless want to deny this idea.
February 22, 2008
B.
What are the legal contours of the problem of corporate governance?
Corporate governance has to do with how power is deployed and controlled in the firm.
These readings are designed to characterize the legal issues that are raised by the
problem of corporate governance and to begin placing this issues in comparative
perspective.
 Hansmann, Henry and Kraakman, Reinier “The End of History for Corporate
Law” Yale International Center for Finance Working Paper January 2000
(published in Jeffrey N. Gordon and Mark J. Roe Convergence and Persistence
in Corporate Governance (Cambridge: Cambridge U. Press, 2004))
 Blair, Margaret M. and Stout, Lynn A., "A Team Production Theory of Corporate
Law", (1999) 85 Virginia Law Review
Hansmann & Kraakman
Shareholder-oriented model: role of directors is to maximize shareholder value.
Historical analysis: distinguish from other alternatives, shareholder model prevails
currently.
Board composition: inefficient to have labour on the board.
Japanese model: based on an interdependent web of interests within the company.
This seems to jive more with a nexus of contracts model.
Other article:
Entreprise is a nexus of contracts, but different groups bring different things, ex.
knowledge, and it is not only capital that is important.
Having one hierarchical layer will lead to inefficiency from negotiations. Therefore,
hierarchy needed for efficiency.
However, law gives too much power to shareholders.
[This text is worth reading]
March 5, 2008
C.
What light does the management literature shed on the problem of
corporate governance?
These readings are drawn from two of the leading contemporary management theorists
and are designed to link the legal discussion of corporate governance with the
perspective of firm management.
 Mintzberg, Henry and Quinn, James Brian, The Strategy Process – Concepts,
Contexts, Cases, Prentice Hall, New Jersey, Ch. 7, 370.
 Mintzberg, Henry and Quinn, James Brian, The Strategy Process – Concepts,
Contexts, Cases, Prentice Hall, New Jersey, Ch. 6, 331
 Drucker, Peter F., The Changing World of the Executive, 6 (1982) Times Book,
31
Mintzberg, “The Strategy Process”
Janda: Concern over management-dominated boards (esp. the persuasive power of
CEO). Sarbanes-Oxley should help with independence of boards.
VI. TAKEOVERS : THE NORMATIVE FRAMEWORK OF THE MARKET FOR
CORPORATE CONTROL
A.
How does the corporate governance regime structure the market for
corporate control?
This reading links the problem of corporate governance to the market for corporate
control through takeovers, drawing in some measure upon game theory.
 Coffee, John C. Jr., "Unstable Coalitions: Corporate Governance as a Multiplayer
Game", The Battle for Corporate Control: Shareholder Rights, Stakeholder
Interests and Managerial Responsibility, edited by Arnold W. Sametz, (1991)
Business One Irwin, 3.
Coffee, “Unstable Coalitions”
B.
What does one learn from a comparison of leading domestic corporate
governance regimes?
The organization of corporate boards and the oversight of managers takes on a
considerable variety of forms in different firms and different jurisdictions. The Maher and
Andersson paper for the OECD presents a useful overview of various approaches.
French, German, Japanese, South African, U.K. and U.S. models of corporate
governance are discussed in the subsequent readings. While you should read these
materials as a package, The first hour and a half will focus on Anglo-American
corporate governance models and the second hour and a half will focus on their rivals.
 Maher, Maria and Andersson, Thomas, "Corporate Governance: Effects on
Firm Performance and Economic Growth", 1999
 Kirkpatrick, Grant, "The Revised OECD Principles of Corporate Governance
and their Relevance to Non-OECD Countries" Corporate Governance: An
International Review, Vol. 13, No. 2, pp. 127-136, March 2005
 Christiane Alcouffe "Judges and CEOs: French Aspects of Corporate
Governance European Journal of Law and Economics 2000.
 Ronald Dore "Deviant of Different? Corporate Governance in Japan and
Germany?" Corporate Governance Vol.13 No.3 May 2005 p.437-46.
 Gregory Jackson "Stakeholders under Pressure: corporate governance and
labour management in Germany and Japan" Corporate Governance Vol.13 No.3
May 2005 p.419-28.
 Lucian Cernat. “The emerging European corporate governance model: AngloSaxon, Continental, or still the century of diversity?” Journal of European Public
Policy, Volume 11, Number 1, February 2004, pp. 147-166(20).
March 12, 2008
Discussion of Bell and Ontario Teachers
(Cour supérieure du Québec, last week)
Held: creditors could have better protected themselves, but did not.
This suggests that, despite Coffee, the primary obligation of directors is towards the
shareholders: this is especially true in the context of an offer to buy.
This also raises the questions of the interests of the shareholders: who are the
shareholders? what are their interests? In the case of Teachers, one could say their
interest in Bell is purely as an investment. However, one might also suggest their
interest is related to the fact Bell is a media communications company. This in turn
makes the idea of “social interest” less clear.
Note that the last revision of Canadian law allows shareholders to raise more easily
questions of “social interest”, allowing them to exert more pressure on the directors of
the company.
Maher, Maria and Andersson, Thomas, "Corporate Governance: Effects on Firm
Performance and Economic Growth", 1999
Distinguishes outside systems (characterized by wide dispersed ownership – the
dominant conflict is thus between strong managers and weak shareholders) and inside
systems (characterized by concentrated ownership – the dominant conflict is thus
between controlling shareholders and weak minority shareholders). Different models of
corporate governance address different models.
The model of corporate governance developed in a particular market changes the
competitiveness of that market as compared to other markets.
Concentrated owners can partially overcome the agency problem because they can
more effectively monitor the managers. However, concentrated ownership has the
disadvantage of “low liquidity” (??) and “reduced possibilities for risk diversification”.
(what does it mean when they say “controlling blockholders or majority shareholders
can use the firm for their own private benefit, expropriating rents at the expense of
minority shareholders and other stakeholders” p34; doc p751).
Dispersed ownership, while it brings higher liquidity, may not provide the right incentives
to encourage long-term relationships that are required for certain types of investment.
Maher: Box 1 (art p14; doc p731)
Dispersed Ownership
Dispersed Voting Power
- many small shh
- one share/one vote
Concentrated Voting Power
- many small shh
- voting power concentrated (via
golden shares, dual class shares,
proxy votes, voting trusts, etc.)
Concentrated Ownership
-> strong mgrs, weak owners
-> takeovers possible
-> strong voting shh, weak
minority shh
-> takeovers impossible
- few large shh
- voting power diluted (by
capping voting percentage that
can be held by particular
shareholder)
- few large shh
- voting rights either aligned with
ownership rights or concentrated
-> strong managers, weak
owners
-> takeovers difficult
-> weak managers, weak
minority owners, strong majority
owners
-> takeovers possible
Kirkpatrick, Grant, "The Revised OECD Principles of Corporate Governance and their
Relevance to Non-OECD Countries" Corporate Governance: An International Review,
Vol. 13, No. 2, pp. 127-136, March 2005
OECD principles represent an attempt to develop principles of corporate governance
that could apply in any model.
The OECD principles of corporate governance cover:
(i) ensuring the basis for an effective corporate governance framework; (ii) rights of
shareholders; (iii) equitable treatment of shareholders; (iv) role of stakeholders in
corporate governance; (v) disclosure and transparency; (vi) responsibilities of the board.
The latter five principles are “aimed at establishing an effective system of checks and
balances between boards and managers”. Managers are important to modern widelyheld company but must be effectively monitored by the board to prevent abuse. The
monitoring should consist of strategic guidance and oversight of internal controls rather
than day-to-day management.
In turn, the board is monitored by the shareholders, who must exercise rights such as
appointing/removing board members. To monitor effectively, there must be basic
standards of disclosure and transparency.
Finally, the company must consider stakeholders such as employees and creditors who
supply the firm with resources and who also need access to timely and relevant
information.
Christiane Alcouffe "Judges and CEOs: French Aspects of Corporate Governance
European Journal of Law and Economics 2000.”
The concept of “social interest” has different meanings to different groups.
Ronald Dore "Deviant of Different? Corporate Governance in Japan and Germany?"
Corporate Governance Vol.13 No.3 May 2005 p.437-46.
Example of Daimler-Chysler: imposed German director model on American company
(including employee representatives on the board of directors).
Gregory Jackson "Stakeholders under Pressure: corporate governance and labour
management in Germany and Japan" Corporate Governance Vol.13 No.3 May 2005
p.419-28.
Lucian Cernat. “The emerging European corporate governance model: Anglo-Saxon,
Continental, or still the century of diversity?” Journal of European Public Policy, Volume
11, Number 1, February 2004, pp. 147-166(20).
12, 14 et 19 mars Classes 18, 19 et 20
La semaine du 17 mars: Troisième exercice (Prise de contrôle)
PART 7- THE GLOBALIZED FIRM: MULTINATIONAL CORPORATIONS AND
NETWORKED FIRMS
21 mars, Classe 21: Is there an emerging transnational corporate governance
regime? Does contemporary corporate governance reflect injustice in corporate
law?
These readings canvass efforts to unify corporate governance regimes. Is this a
worthwhile project? Is it anomalous that transnational firms cannot yet be said to
operate within a transnational corporate governance regime?
 William W. Bratton and Joseph A. McCahery. “Comparative Corporate
Governance and the Theory of the Firm” Columbia Journal of Transnational Law,
Vol. 38, No. 2, 1999
Comparison of corporate law regimes.
In context of increasing convergence, what is the future for these divergent models?
Two large “families” of corporate governance:
1) External/market model (US/UK): Oriented towards “agency problem”: how to use
fiduciary obligations to get managers to consider interests of shh or skh?
2) internal/block model (Euro/Japan): Oriented towards the problem of majority
blockholders and minority shh.
We saw that Canada is somewhere in between the two: not purely anglo-American
(because we have many companies owned in block, ex. Power Corp., Magna).
Bratton & McCahery, “Comparative Corporate Governance”
Corp gov’t regimes are indivisible, like an ecosystem. Therefore, convergence is
unlikely in a global context.
Each model has strengths/weaknesses that complement each other.
1) Market model: more discretion for operations, larger separation ownership/control.
Problem:
- agency problem can affect performance.
- lack of continuity can lead to lack of long term thinking (looking for quarterly
performance of increased shh value).
Strengths: flexibility of capital
2) Block model: less dispersion, control more closely held.
Problem:
loss of objectivity of the management
The meeting of these two models happens without direct state intervention: will not be a
huge shock. Elements of each model will be retained – not a strong convergence. Law
is silent on the choice of models. (??)
What are the practical limits of the state’s ability to regulate?
To what extent is it possible to “mix and match” the strengths of each model?
ex. block model has advantages for monitoring; dispersive model has advantages
Possible solution: hybrid model with “mini-blocks” and dispersed shh.
B&M: no stable ground between block and dispersed ownership.
26 mars, Classe 22: What are the legal implications of the multinational and
transnational firm, of transnational strategic alliances and of networked firms?
These readings identify legal issues associated with the multinational corporation. The
issues are by now familiar from your other readings, but simply take on a transnational
dimension. Thus, for example, where is the legal personality of the transnational firm
and how do overlapping corporate governance regimes interact? To this point we have
considered the firm as a discrete entity. Yet, the contemporary globalized firm is more
often than not part of a web of relationships among firms and thus itself involved in
multi-party governance structures. Autunes present a sophisticated understanding of
the legal problems raised by the networked corporation. Castells puts this phenomenon
into historical context and Evans and Wurster discuss the implications of the "new
economy" for the corporate form. The Figure gives an example of a complex alliance
arrangement.
 Peter Muchlinski. “Human rights and multinationals: is there a problem?” (2001:1)
77 International Affairs 33
 Reuven S. Avi-Yonah. “National Regulation of Multinational Enterprises: An
Essay on Comity, Extraterritoriality, and Harmonization”
PART 8
CORPORATE SOCIAL RESPONSIBILITY: FROM LEGITIMATE GOVERNANCE TO
RESPONSIBLE CITIZENSHIP
28 mars, et 2 avril Classes 23 et 24: What is the legal foundation of corporate
social responsibility and corporate citizenship?
We have studied the corporate constitution in comparative and transnational
perspective. The corporation, originally a creature of the state, wields authority within
the corporate governance regime that has at times dramatic social and political
implications To raise the question of the social responsibility of the corporation is itself
controversial. These readings do so, documenting both the law’s function and the
pattern of corporate practice.
 Lord Wedderburn of Charlton, "The Legal Development of Corporate
Responsibility – For Whom Will Corporate Managers be Trustees?", Corporate
Governance and Directors’ Liabilities – Legal, Economic and Sociological
Analyses on Corporate Social Responsibility, edited by Klaus J. Hopt and
Gunther Teubner, (1985) Walter de Gruyter, Berlin, New York, 3 [bizcomplete
p901]

Deborah Doane. “Beyond Corporate Social Responsibility? Corporate Minnows, mammoths and markets.
Futures Volume 37 pp.215-229 (2005)
4 avril, Classe 25: Can the state remain the regulatory foundation of corporate
social responsibility?
These readings discuss how corporations might be regulated to prod them toward social
responsibility. Note that these readings are now in various respects dated, which may
reveal emerging institutional incapacity of the state in the wake of globalized markets.
 Graham, Cosmo, "Regulating the Company", Capitalism, Culture, and Economic
Regulation, ed. by Leigh Hancher and Michael Moran, (1989) Clarendon Press,
Oxford, 199
 Green, Ronald M., "Responsibility and the Virtual Corporation", Is the Good
Corporation Dead? Social Responsibility in a Global Economy, edited by John W.
Houck and Oliver F. Williams, Rowman & Littlefield Publishers, Inc., 37
Cosmo Graham “Regulating the Company”
“Why should companies receive legal advantages?”
Graham discusses three models: the classical model, the pluralist model, and the neoclassical model.
Under the classical model, the market provides sufficient constraints on companies.
The role of the law is thus limited primarily to enforce the terms of the creation of the
company. The law sets the “arena”, but allows the evenly-matched market players to
pursue their aims within it. This model has become increasingly untenable, but it is
unclear what model has replaced it.
The pluralist model sees the social system as a balance of power among overlapping
groups, and the state as an “umpire” that must adjudicate the imperfect competition that
exists between them. Under this model, markets always have necessary state
interventions. Graham associates this model with West Germany and US.
The neo-classical model says either that corporate power is restrained by market
mechanisms (positive case) or that trying to replace market constraints is impossible
(negative case). Under this model, profit-maximization offers the only legitimate guide
to corporate action. Market constraints to the corporation include the product market,
but also the market for corporate control and the market for managerial services. These
constraints perform the monitoring role that in the classical model is played by
shareholders.
Janda wants us to think primarily about the pluralist model: if today’s company is a
“point of contact” between different social orders, does that change anything about the
way it is regulated?
One thing we talk about today is a company’s “sphere of influence”, that is, the sphere
in which they are able to effect change. The sphere of influence might be one limit to a
company’s duties of social responsibility: the social responsibility is found only within the
sphere of influence. For example, an oil company might have responsibilities for the
environment, but we might draw the line at making it responsible for human rights
violations in China (unless its sphere of influence extends that far).
Green “Responsibility and the Virtual Corporation”
Discusses a Merck project to find a cure for “river blindness”, a project with slim
chances of commercial success.
Both the classical view (shareholder wealth maximization) and corporate social
responsibility (duties toward all stakeholders) are outdated. Instead, the business
excellence model argues that a commitment to all stakeholders is the underpinning of
economic success.
The Merck investment, for example, is more than ‘just’ a PR move. By acting for a
broader benefit, Merck reaps rewards in increased employee and researcher pride.
Also, they counter potential public pressure for greater governmental regulation of their
industry. Thus, while the investment in the “river blindness” cure is not, strictly
speaking, a commercially viable investment, it nevertheless is consistent with the
objectives of business excellence.
8 avril, Class 26: Can corporate law be just?
Any inquiry into the law must be tied back to an inquiry into justice. The course
concludes with some reflections on justice in corporate law.

Eells, Richard, The Meaning of Modern Business – An Introduction to the
Philosophy of Large Corporate Enterprise, Columbia University Press, New York
and London, 307
11 avril, Classe 27: Exam Preparation
28 avril: (14h30) Examen
APPENDIX: READING BALANCE SHEETS
 Hamilton, Robert W., Fundamentals of Modern Business, Little Brown and
Company, Boston, Toronto, 149