Legal and Theoretical Foundations of the Business Corporation

Abstract

In accordance with comparative law methodology, the chapter seeks to define and delineate in functional terms the subject matter of this book. It aims to provide a workable conception of ‘business corporation’ and ‘company law’ that transcends national boundaries. The modern business corporation (or company) is a comparatively recent phenomenon that emerged in the nineteenth and twentieth centuries. Its rise is linked with the development of the modern nation state and capitalism. Despite a growing interest in comparative company law scholarship, most lawyers still approach the subject with preconceptions formed by their own domestic corporate law experience. This can be problematic given that major differences in typology, historical development, regulatory framework, and legal characteristics remain. Consequently, this chapter discusses the concepts and terminology used in this context in common law and civil law systems, explores separate legal personality and limited liability as defining properties of the business corporation, provides an overview of the historic development of the business corporation and of corporate (law) theory, and analyses the sources of domestic corporate law.