Document Type
Article
Publication
Columbia Business Law Review
Year
2026
Citation Information
Andrew A. Schwartz, Finite Ventures, 2025 Colum. Bus. L. Rev. 655 (2026), available at https://scholar.law.colorado.edu/faculty-articles/2077.
Abstract
The law endows corporations and other business organizations with the awesome power of perpetual life—unless the charter expressly provides for a certain duration, such as ten years. But does anyone ever actually choose limited life? Why would they?
This article reveals that limited-life business entities—finite ventures—play a significant and underappreciated role in modern commerce. Private equity and venture capital funds, SPACs, and insurance syndicates are all organized with a limited lifespan.
Their motivation? This article claims that limited life is a valuable, but often overlooked, tool for ameliorating agency costs: the managers of a finite venture know they must produce results by the end of the term—their future career prospects depend on it—so they have an incentive to be diligent and loyal.
Even so, limited life has drawbacks—and perpetual life has benefits of its own—so the trick is to know when to use it. To guide decision-makers, this article identifies key factors that weigh in favor of or against finite structure. It closes by proposing novel applications of limited life as a tool of corporate governance— inviting scholars and practitioners alike to rethink the assumption of corporate immortality.
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