Ownership Of The Firm
In modern economies, large-scale enterprise exhibits a variety of ownership forms. Most common and familiar is ownership by those persons -- individuals or organizations -- that supply the firm with financial capital. Other forms of ownership are important as well, however, including employee ownership (as in partnerships of professionals), ownership by suppliers of other factors of production (as in farm marketing cooperatives), ownership by customers (as in consumer-owned utilities, mutual insurance and banking companies, condominium housing, and business-owned wholesale, supply, and service cooperatives), nonprofit firms, and governmental enterprise. This essay briefly explores three questions raised by such a diverse pattern of ownership: First, to what extent do underlying economic factors account for variation in ownership forms across industries, across societies, and across time? Second, what is the influence of law upon these patterns? Third, to what extent has law, and particularly organizational law, adapted to facilitate the formation and management of the forms of ownership that have evolved?