The Merging of Ownership and Control

If shareholders controlled every decision in their companies, it would disrupt the foundational separation of ownership and control that defines modern corporations. Traditionally, shareholders own companies, while directors and officers manage them, allowing shareholders to pool assets under independent fiduciary oversight. This separation isn’t just a matter of contractual freedom, but a legally mandated mechanism essential for coordinating diverse interests. However, recent Delaware legislation threatens to merge ownership and control, undermining this vital structure. This Article argues that the legislation lacks a theoretical foundation and calls for its repeal to preserve corporate efficiency

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