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Thesis

French

ID: <

http://hdl.handle.net/20.500.11794/27936

>

Where these data come from
The choice of legislative provisions in joint stock company law in the light of a study based on the economic analysis of law

Abstract

The legislature intervening in joint stock company law may do so in different ways, either by using mandatory, supplementary and enabling provisions. Each of these types of provision has its own characteristics which affect the freedom of the parties involved in the contractual relationship, as well as the risks of error or exploitation. That view relates to the choices which the legislature may make in this area and the various issues raised are analysed from the point of view of the economic analysis of the law. That argument begins with a preliminary part which presents the economic analysis of the law as a conceptual framework. In addition to introducing this method more generally, this section allows some concepts which are used on many occasions in the context of this thesis to be further developed. After presenting the methodology, I turn to the first part of that argument, which consists of drawing up an analysis grid based on the economic analysis of the law which should make it possible to determine the type of legislative provision to be used for a specific question of joint stock company law. That part of the thesis begins with a general presentation of the joint stock company and different theoretical concepts of that form of undertaking. I shall then turn to legislative interventions in company law by considering first the objectives of the legislature in this area and the different types of legislative provisions which may be used in this area of law. Having studied these more theoretical concepts, I shall examine the reality of the Quebec law of joint-stock companies. We first look at the history of the law on joint stock companies applicable in Quebec. Since the model of the economic analysis of the law is essentially based on freedom of contract, I examine that question from the point of view of Quebec law of a civilist tradition, considering first the justifications for freedom of contract and its various limits, such as public policy, good faith and the duty of loyalty, as well as abuse of rights. In the last section of that first part of the thesis, I elaborate an analysis grid, which is based on hypothetical negotiation. The aim of this grid is to determine the type of legislative provision chosen if all stakeholders in the joint stock company were negotiating on this issue under ideal conditions. The results are compared with the solutions chosen by the legislator in the Québec Joint Stock Companies Act (“LSAQ”), and comparatively in the Canadian Joint Stock Companies Act (“LCSA”). When we find that there are differences between our preferred and Quebec and federal law solutions, we come forward with proposals for reform. The second part of that argument is devoted to the implementation of that conceptual framework. We therefore present various issues relating to the law of companies limited by shares and try to determine, in the light of our analysis grid, what kind of legislative provision should be used for each given question. The different topics are grouped into four main themes, namely: the protection of shareholders, the duties of directors, the financing of the company and the protection of creditors. The first topic addressed is the protection of shareholders. The subjects discussed in this chapter are the right to repurchase at the request of shareholders, the recovery in the event of abuse or unfairness and the liquidation of the company at the request of the shareholders. The second topic selected is the duties of administrators. The first topic studied is the duty of care of directors. It is necessary not only to determine who will be the beneficiaries of this duty, as well as its content. The same issues are addressed for the second issue of this section, i.e. the duty of loyalty of directors. The third topic discussed in this section is the process of concluding a contract between the company and one of its directors. Finally, the last question discussed under this theme is the responsibility of directors for unpaid salaries of employees of the company. The third theme is equity financing. The questions discussed in this section concern the rights and privileges that may be attached to the holding of such securities. The first issue under consideration is the use of shares with multiple voting rights. The second issue under consideration is financial support to shareholders. The final issue in this section is the approval of significant changes by shareholders. The fourth and final topic under discussion focuses on creditor protection, which is another important stakeholder in the joint stock company. Two issues are discussed in this section. The first is that of the solvency tests which are required in particular when declaring and paying dividends to the shareholders of the company. The second issue is the protection of creditors in the event of a merger of the debtor company.

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