Document Type

Article

Abstract

Publicly traded corporations rarely use the nearly absolute freedom afforded them to draft charters that deviate from the default terms of state corporation law. Conventional explanations for this phenomenon are unconvincing. A more promising explanation lies in the lack of any feasible amendment mechanism that will assure efficient adaptation of charter terms as changing circumstances dictate during the long expected lifetime of a public corporation. In effect, by adopting state law default terms, corpora- tions delegate to the state the process of amending charter provisions over time.

Date of Authorship for this Version

2006

Included in

Law Commons

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