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1 Berkeley Bus. L.J. 183 (2004)
Why Corporations?

handle is hein.journals/berkbusj1 and id is 189 raw text is: Why Corporations? Larry E. Ribsteint TABLE OF CONTENTS A B ST R A C T .................................................................................................... 185 Introduction ...................................................................................................... 185 I. An Efficiency-Based Explanation for Corporations ..................................... 187 A. The Role of Standard Forms ................................................................ 187 B. The Suitability of Corporate Features .................................................. 188 I1. The Costs of Incorporation .......................................................................... 190 A. The Choice Between Corporation and Partnership .............................. 190 1. Chandler and Standard Forms ........................................................ 191 2. Fundamental Similarities of Corporation and Partnership ............. 191 3. Problems with the Continuity Theory of Incorporation ................. 193 4. The Unanswered Question: Why Require Incorporation? ............. 195 B. The Problems of Corporate-Style Governance ..................................... 196 1. Overview of Corporate Governance: Director Primacy ............ 196 2. A ccountability ................................................................................ 198 3. Infl exibility ..................................................................................... 20 1 C. The Changing Nature of the Firm ........................................................ 206 D. The Concession Theory and Regulation .............................................. 208 III. The Partnership Alternative ....................................................................... 210 A. Partnership Structure ............................................................................ 210 B. The Contractibility of Partnership ........................................................ 212 C. Flexibility and Regulation .............................. 216 IV. A Political Theory of the Corporate Form ................................................. 223 A. The Relevant Interest Groups ............................................................... 223 B. Direct Regulation of Corporate Features .............................................. 225 C . The C orporate Tax ................................................................................ 226 V. Non-Political Explanations for Corporate Dominance ............................... 230 VI. Conclusions and Implications .................................................................... 231 t Richard W. and Marie L. Corman Professor, University of Illinois College of Law. Prepared for the Berkeley Business Law Journal Symposium on The Role of Law in Promoting Long-Term Value for Shareholders, August 23-25, 2003. Thanks to Steve Bainbridge and other participants at the conference, as well as Arthur Jacobson, for helpful comments.

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