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Paper Topic:

Delaware effect in the European Union

Delaware Effect in the European Union

The state of Delaware has a well developed company law , which attracts various companies from other states to incorporate in Delaware . The company law of Delaware provides greater power to management whilst providing significantly , less protection , in comparison to other states to shareholders . This feature has served to entice a large number of companies to move their operations to Delaware

The perception was that as the management was more adept at managing the company than the shareholders such empowerment would be beneficial to all concerned

. The case law of Delaware has supported such legislation Nevertheless , it has been anticipated that there would be reforms to the existing company law , which would make it more beneficial to shareholders

There are several qualms regarding the Delaware effect , such as whether it is beneficial and whether there is any competition in Delaware . These doubts have not been resolved . Apparently , the Delaware approach is detrimental to the interests of shareholders , because it upholds the superiority of management . Although this factor has proved to be attractive to companies , there is no evidence that the shareholders interests had been sidelined . This has been borne out by the keenness shown by the public to invest in these companies

Furthermore , there is virtually no competition from the other states to Delaware . This is demonstrated by the widespread use of the Model Business Corporation Act . As such , engaging in completion with Delaware does not bestow any incentive on a state

Delaware 's legal...

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