Limited Liability through the Lens of Expected Value Analysis’

Open Access
Authors
Publication date 2025
Host editors
  • M. Bartl
  • L. Burgers
  • C. Mak
Book title Uncovering European Private Law
Book subtitle a student handbook
ISBN
  • 9781805115052
  • 9781805115069
ISBN (electronic)
  • 9781805115076
  • 9781805115090
  • 9781805115083
Chapter 8
Pages (from-to) 155-170
Number of pages 16
Publisher Cambridge: OpenBook Publishers
Organisations
  • Faculty of Law (FdR)
  • Faculty of Law (FdR) - Centre for the Study of European Contract Law (CSECL)
Abstract The aim of this chapter is to illustrate how limited liability rules enable the transfer of risks and costs away from the shareholders of a corporation to other parties, such as creditors. We illustrate this inherent feature of limited liability by applying expected value analysis, a simple and intuitive analytical framework, to two stylised numerical examples. Subsequently, we briefly discuss several legal strategies that seek to address the externalisation of risks and costs through the corporate form.
Document type Chapter
Language English
Published at https://doi.org/10.11647/OBP.0448.08
Downloads
obp.0448.08 (Final published version)
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