My colleague Eric Orts has just come out with Business Persons: A Legal Theory of the Firm, and I must give it my highest recommendation. Eric's argument is that the independent legal status of the firm is critical to making sense of it - and that its legal personhood does a better job of explaining what firms are doing than do reconceptualizations of them as nexuses of contracts, or as a set of principal-agent relationships. "Without the social technology and 'forms' provided by law, business firms would be indistinguishable from informally organized social groups, clubs, or gatherings of people pursuing similar interests," he writes. The books then tours the many ways that law makes firms distinctive.
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