Abstract
Economic analysis of law has been used for policy analysis and to explain legal doctrine. It can also be used by a lawyer in providing a legal opinion. This paper provides an example of how economic analysis can be used in giving a legal opinion. The example is an opinion on the likelihood that investors would be held personally liable for debts arising in the conduct of businesses carried on through a business income trust. Since there is no direct economic analysis of this question in the existing literature, the paper uses the economic analysis of the limited liability of corporations. It uses this analysis because it focuses on the same policy question of whether investors should be made personally liable for debts incurred in the carrying on of a business. The paper reviews the economic analysis of the limited liability of corporations. It then considers how this analysis may extend to business trusts and to business income trusts.
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