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The Enterprise Entity and the Constitution of the American Economic Republic

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  • Biondi Yuri

    (CNRS, France)

Abstract

Both Citizens United and the recent debate on opinions provided by rating agencies amid the financial crisis face the problems raised by defining the corporation as a legal person and a legal subject. In contrast, the enterprise entity perspective considers the corporation as an intermediate collective body and a legal object, granted with instrumental legal personality in some circumstances. The legal person view has been historically important to articulate private and public orders, and protect the private domain from abuse of public power. At the same time, it was and still is important to impose some social control and social duties towards the community on enterprise entities, especially in a world where corporations are allowed to own and control other corporations, constituting corporate groups that are autonomous and opaque fields of private power. From this perspective, the definition and role of enterprise entities point to the constitution of legal-economic orders. Drawing upon Dewey's suggestion, the corporation can be defined as a functional set of mutual relations that has social consequences, controlled and modified by being the bearing of rights and obligations, privileges and immunities. This understanding embeds the corporation in its social context fraught with immanent conflicts of interest and representation. In this context, the enterprise entity emerges as an overarching principle (and idea) that can foster the unfolding formation of transient social orders. Here the quest for legal-economic principles becomes unavoidable. Like the corporation, these principles acquire duties and rights. They have the right to be tentatively free, which implies two distinctive duties: they are responsible towards reality, because they are expected to guide human actions in situation; and they are responsible towards society, because they are expected to facilitate welfare and justice and liberty in ordering social activities.

Suggested Citation

  • Biondi Yuri, 2011. "The Enterprise Entity and the Constitution of the American Economic Republic," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(3), pages 1-13, December.
    • Handle: RePEc:bpj:aelcon:v:1:y:2011:i:3:n:2
    DOI: 10.2202/2152-2820.1051
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    References listed on IDEAS

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    1. Strasser Kurt A. & Blumberg Phillip, 2011. "Legal Form and Economic Substance of Enterprise Groups: Implications for Legal Policy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(1), pages 1-30, January.
    2. Avi-Yonah Reuven S., 2011. "Citizens United and the Corporate Form," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(3), pages 1-56, December.
    3. Bratton William W., 2011. "Reuven Avi-Yonah's "Citizens United and the Corporate Form": Still Unuseful," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 1(3), pages 1-10, December.
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    Cited by:

    1. Büttner Tim & Thiemann Matthias, 2017. "Breaking Regime Stability? The Politicization of Expertise in the OECD/G20 Process on BEPS and the Potential Transformation of International Taxation," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 7(1), pages 1-17, April.
    2. Biondi Yuri, 2017. "The Firm as an Enterprise Entity and the Tax Avoidance Conundrum: Perspectives from Accounting Theory and Policy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 7(1), pages 1-9, April.
    3. Styhre Alexander, 2018. "The Making of the Shareholder Primacy Governance Model: Price Theory, the Law and Economics School, and Corporate Law Retrenchment Advocacy," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 8(3), pages 1-31, December.

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