More and more companies appear with strange abbreviations behind their business name. Consider Chrysler Group LLC (instead of Inc.) or LVMH Montres & Joaillerie France SAS. Some even speak about the ‘endangered corporate form’ and point to the rise of the uncorporation. This primer examines how the uncorporation has evolved in the United States and, more recently, in other economies around the world. We find that the growth in non-listed business forms in Europe, Latin America and Asia has been shaped by a mixture of learning and professional advice arising from the company law review process, as well as by the indirect influence of overseas business forms. We examine the main components of uncorporate business forms that are responsible for limiting transaction costs, curbing opportunism and creating organisational structures that are compatible with entrepreneurial expectations. We show the main differences between the partnership-type and corporatetype uncorporations, particularly the LLC in the United States (US-LLC), the SAS in France and Colombia, and the LLP in the United Kingdom (UK-LLP), Singapore (S-LLP), India (I-LLP) and Japan (Yugen Sekinin Jigyou Kumiai, J-LLP). We find that, given the pitfalls in the evolution of uncorporation laws, an international Model Act would be consistent with lower transaction and information costs and could help to encourage cooperation between firms situated in different jurisdictions.

This paper explores the shareholders' meeting's corporate governance role. We argue that the functions performed by the shareholders' meeting are highly dependent on companies' ownership structure, and we focus on the case of jurisdictions, like those in Continental Europe, with a majority of companies with concentrated ownership structures. In theory, the shareholders' meeting is the time and place where shareholders' property rights are protected and where shareholders aim, through, e.g., voting and litigation rights, to protect their investments in the firm. Consequently, attention should be drawn to the development of efficient tools to accomplish this objective. In this respect, the main corporate governance challenge is to combat expropriation and tunnelling by controlling shareholders. We attempt to contribute to the current debate on the shareholders' meeting's governance role by providing some basic regulatory guidelines that may inspire the legislative proposals that are now being drafted in Spain as well as in other parts of Continental Europe. On the one hand, we explore possible ways to empower (minority) shareholders through voting at the shareholders' meeting. On the other hand, we conduct an empirical study of rulings applying the section of the Spanish Public Companies Act governing challenges to shareholder resolutions. The data provide evidence that this litigation mechanism, as is often claimed, faces both under and over-enforcement problems and is therefore in need of reform. We offer a tentative roadmap for improvement, based on the idea of incentivising value-increasing litigation without favouring the development of opportunistic suits. We also highlight the importance of disclosure and information rights and their impact on the litigation strategy.

This paper re-evaluates the corporate governance concept of ‘board independence’ against the disappointing experiences during the 2007-08 financial crisis. Independent or outside directors had long been seen as an essential tool to improve the monitoring role of the board. Yet the crisis revealed that they did not prevent firms' excessive risk taking; further, these directors sometimes showed serious deficits in understanding the business they were supposed to control, and remained passive in addressing structural problems.

A closer look reveals that under the surface of seemingly unanimous consensus about board independence in Western jurisdictions, a surprising disharmony prevails about the justification, extent and purpose of independence requirements. These considerations lead me to question the benefits of the current system. Instead, this paper proposes a new, ‘functional’ concept of board independence. It would redefine independence to include those directors that are independent of the firm's controller, but, at the same time, it would require them to be more accountable to (minority) shareholders.

A rating trigger is a particular type of debt covenant that mandates the borrower to maintain its own credit rating above a certain rating threshold, requiring, in the event of a rating downgrade, the adoption of specific enforceable actions aimed at securing the lender claims from the borrower's higher risk level. Rating triggers lower the cost of borrowing capital, but when activated, they exacerbate the borrower's need for liquidity just at the moment when its credit risk is higher, making the borrower's default more likely to occur. Despite the potential threat posed by rating triggers on debt markets, these contractual devices remain almost unregulated both in the US and in Europe. The purpose of this paper is first to analyse the effects rating triggers can have on overall market risk and second to assess the proliferation of rating triggers among large US and non-US companies in order to establish whether these contractual devices need stricter regulation. The article is divided in two parts. Sections 2 to 5 provide an overview of the different types of triggers and analyse the rationale behind their use in terms of advantages and disadvantages for both issuers and investors. In sections 6 to 9, I perform an empirical analysis by assessing the rating triggers that have been used by Dow Jones Industrial Average Index companies. I then examine the correlation between the use of rating triggers and the companies' risk profiles by measuring their credit ratings and their Altman's Z-Scores in order to find out whether triggers are mostly used by risky companies, capable of being impaired by the triggers' activation and thus posing a threat to market stability. In section 10, I strengthen the analysis by examining whether such correlation also applies to non-US companies which use rating triggers. In section 11 conclusions are drawn suggesting the introduction by US and European regulators of a specific duty to disclose all the rating triggers that listed companies include in bond indentures and in financial contracts every year.