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Details
- Presents a new legal theory of the firm
- Provides an overview of the nature and purpose of business firms
- Contributes to current debates on the regulation of business firms
- Broad interdisciplinary appeal
Business firms are ubiquitous in modern society, but an appreciation of how they are formed and for what purposes requires an understanding of their legal foundations. This book provides a scholarly and yet accessible introduction to the legal framework of modern business enterprises.
It explains the legal ideas that allow for the recognition of firms as organizational "persons" having social rights and responsibilities. Other foundational ideas include an overview of how the laws of agency, contracts, and property fit together to compose the organized "persons" known as business firms. The institutional legal theory of the firm developed embraces both a "bottom-up" perspective of business participants and a "top-down" rule-setting perspective of government.
Other chapters in the book discuss the features of limited liability and the boundaries of firms. A typology of different kinds of firms is presented ranging from entrepreneurial one-person start-ups to complex corporations, as well as new forms of hybrid social enterprises. Practical applications include contribution to the debates surrounding corporate executive compensation and political free-speech rights of corporations.
Readership: Academics, researchers, and students of business, law, economics, and sociology, and other disciplines that focus on the institution of the modern business enterprise; those who want to understand the "legal matrix" underlying modern firms.
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Introduction - The Recognition and Boundaries of the Firm
1: Foundations of the Firm I: Business Entities and Legal Persons
2: Foundations of the Firm II: Agency, Contracts, and Property
3: The Public/Private Distinction: Two Faces of the Business Enterprise
4: Enterprise Liability, Business Participant Liability, and Limited Liability
5: The Nomenclature of Enterprise: A Taxonomy of Modern Business Firms
6: Managing and Regulating the Shifting Boundaries of the Firm
7: Two Applications
Conclusion
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Eric W. Orts is the Guardsmark Professor at the Wharton School of the University of Pennsylvania. He is a full professor in the Legal Studies and Business Ethics Department with a secondary appointment in the Management Department. He has also served as a visiting professor at the University of Michigan Law School, NYU School of Law, and UCLA School of Law, and been a Eugene P. Beard Faculty Fellow in the Center for Ethics and the Professions at Harvard University and a Chemical Bank Fellow in Corporate Responsibility at Columbia Law School. At Wharton, Professor Orts teaches courses in the law of corporate management and finance, responsibility in professional services, introduction to law, and environmental management. He is an academic co-director of the FINRA at Wharton Institute for Certified Regulatory and Compliance Professionals in executive education, as well as the faculty director of the Initiative for Global Environmental Leadership.
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"This book is a path-breaking analysis of the business firm from a legal perspective. As shown by the debate surrounding the Supreme Court's Citizens United decision, the question of corporate legal personality has resurfaced as one of the key legal and political issues of our time. Prof. Orts' book is indispensable reading for anyone interested in exploring the extent to which "corporations are people too."" - Reuven S. Avi-Yonah, Irwin I. Cohn Professor of Law, University of Michigan Law School
