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Enterprise Law and the Eclipse of Corporate Law

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  • Ewan McGaughey

Abstract

The corporation is among the most important institutions of our age, and yet it is eclipsed by the enterprise. Corporate law theories have asserted that a corporation is a ‘person’, a ‘nexus of contracts’, that it has ‘proprietary foundations’, or is a ‘concession of the state’. These theories wander across every Roman law category – persons, obligations, property, and public body. None work, because corporations combine elements of each category, but are more. A better tradition sees the corporation as a ‘social institution’, and as one legal form of ‘enterprise’. Corporate law, traditionally confined, is not enough to understand corporations. We must integrate labour, competition, tax, tort, human rights, and public law, because this full body of enterprise law decisively changes corporate finance and governance. It also changes the rights that corporations distribute to investors, workers or service-users. In law, the concept of the ‘enterprise’ (or ‘undertaking’ or ‘group’) has become a dominant legal tool, because it adopts a functional understanding of firms that matches economic reality, eclipsing legal form. In that reality, most major listed corporations are under sector-specific regulation, including in banking, telecoms, big tech, or energy, as are corporations without shareholders such as hospitals or universities. Broadening our horizon enables us to teach how businesses, regulated industries, and public services – all major corporations – actually work. It lays the foundation for accurate empirical research. By shifting our vision to enterprise law, we may contemplate our entire economic constitution as it truly is.

Suggested Citation

  • Ewan McGaughey, 2024. "Enterprise Law and the Eclipse of Corporate Law," Working Papers wp542, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp542
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    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2024/09/cbrwp542.pdf
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    More about this item

    Keywords

    Enterprise; corporation; regulation; sector-specific; public services; labour; shareholders; investors; social institution;
    All these keywords.

    JEL classification:

    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K2 - Law and Economics - - Regulation and Business Law
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • L8 - Industrial Organization - - Industry Studies: Services
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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