IMMUNITE DES ACTIONNAIRES ET LEVEE DU VOILE CORPORATIF: PERSPECTIVES DE L'ANALYSE ECONOMIQUE DU DROIT

Abstract

This paper sets out a legal and economic analysis of the rationale behind shareholder immunity. Market research shows that although shareholder immunity can reduce capital-actions costs, thereby fostering the financing of companies, it may also lead to distortions in the companies' investment processes by allowing them to undertake investment plans without having to assume the whole cost. Following this perspective, the paper suggests that exceptions to the shareholder immunity principle, which may expose the corporate system and pin responsibility on shareholders, should be focussed on controlling the prejudicial effects of this principle on ressource allocations. An analysis of these exceptions, which are codified in article 317 of the Quebec Civil Code, indicates that this arrangement is an inadequate mechanism for controlling prejudicial effects. A more in depth understanding by the Legislature of the economic function of this judicial institution, would without doubt enable the utilization of better control methods.