The Making of Corporate Legal Concession Theory†

Professor Watson’s The Making of the Modern Company traces the development of the modern corporate form back to the East India Company, disproving a common notion that company law originated solely with small, private companies. This review article argues three key implications of this excellent book. First, Watson focuses on the duality of the modern company—with state-provided and private features. This cuts through, and goes a long way to resolving, the ongoing historic debate as to the nature of the company. Second, the primary unit of study chosen—the modern company—reminds corporate lawyers of our role in studying this duality in a very crowded field. Third, despite eschewing ‘concession theories’ of company law (which hold that the company is merely a concession from the state), Watson demonstrates a role for the state in the modern company that is often overlooked.