The Anatomy of Corporate Law: The New Edition

The third 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, Mariana Pargendler, Wolf-Georg Ringe, and Edward Rock) is now available for pre-order at the Oxford University Press. The book seeks to provide the reader with a solid functional framework to understand corporate law from a comparative perspective.

This edition has been comprehensively revised and updated to reflect the profound changes in corporate law and governance practices that have taken place since the second edition published in 2009. These include numerous regulatory changes following the financial crisis of 2008 and the changing landscape of governance, especially in the US, with the ever more central role of institutional investors as (active) owners of corporations. The geographic scope of the coverage has been broadened to include an important emerging economy, Brazil, to its selection of key jurisdictions comprising the US, the UK, Italy, France, Germany, and Japan. In addition, the book now incorporates analysis of the burgeoning use of corporate law to protect the interests of "external constituencies" without any contractual relationship to a company, in an attempt to tackle broader social and economic problems.

As in prior editions, the book starts from the premise that corporations (or companies) in all jurisdictions share the same key legal attributes: legal personality, limited liability, delegated management, transferable shares, and investor ownership. Businesses using the corporate form give rise to three basic types of agency problems: those between managers and shareholders as a class; controlling shareholders and minority shareholders; and shareholders as a class and other corporate constituencies, such as corporate creditors and employees.

After identifying the common set of legal strategies used to address these agency problems and discussing their interaction with enforcement institutions, The Anatomy of Corporate Law illustrates how a number of core jurisdictions around the world deploy such strategies. In so doing, the book highlights the many commonalities across jurisdictions and reflects on the reasons why they may differ on specific issues.

The analysis covers the basic governance structure of the corporation, including the powers of the board of directors and the shareholder meeting, both when management and when a dominant shareholder is in control. It then analyses the role of corporate law in shaping labor relationships, protection of external stakeholders, relationships with creditors, related-party transactions, fundamental corporate actions such as mergers and charter amendments, takeovers, and the regulation of capital markets.

We hope that students and scholars from around the world and at various stages in their careers, from undergraduate law students to well-established authorities in the field, will continue to consult this book as a starting point for their inquiries.

Chapter 1 and Chapter 3 of the Third Edition of the Anatomy of Corporate Law are available for download on SSRN. 

John Armour is the Hogan Lovells Professor of Law and Finance and Luca Enriques is the Allen & Overy Professor of Corporate Law at Oxford University. Mariana Pargendler is a Professor of Law at FGV School of Law in São Paulo and a Global Associate Professor of Law at New York University School of Law. Wolf-Georg Ringe is a Professor of International Commercial Law at Copenhagen Business School.