A GJ Topics article.

Abstract

The legal capital doctrine was born as a compromise between the conflicting interests of corporations' creditors and shareholders. Indeed all capitalistic societies recognize that the distribution of benefits to shareholders is the incontestable purpose of corporations. Therefore whenever the corporation's activity results in the creation of value, the issue arises whether such value should be distributed to shareholders or committed to the corporation's treasury as a guarantee for the payment of creditors' claims. Although the aim of the legal capital rules is precisely to accommodate this conflict, American legislations have now abandoned those rules and Luca ENRIQUES and Jonathan R. MACEY conclude that such example should be followed by the European Union, and thus by the French Legal system, whose provisions on legal capital were directly inspired or at least confirmed by the Second Directive. On the contrary, the present study aims at showing that although the American abandonment of the legal capital doctrine was well justified by its incapacity to achieve its purpose, such a conclusion cannot be extended to the French solutions. Indeed the explanation of this incapacity is not to be found in the concept of legal capital itself but in the permissive aspect of the American rules and in their loose application. This article demonstrates that the European orientation should be continued, for the legal capital doctrine is perfectly able to serve its purpose when an appropriate set of provisions, such as the French one, is taken and strictly applied.

Originally published in Global Jurist Topics.

Recommended Citation

Andrieux, Grégoire (2002) "Capital Social et Protection des Creanciers. Approche Comparative France / Etats-Unis," Global Jurist Topics: Vol. 2 : Iss. 2, Article 3.
Available at: http://www.bepress.com/gj/topics/vol2/iss2/art3