John D. Morley is Professor of Law at Yale Law School. This post is based on his recent article.
Just about every big business we can think of is organized as a corporation or something similar. But, what, exactly does the corporate form accomplish? What does it do that other forms of organization cannot, and what did its development in early modern England contribute to the making of the modern world?
In a new article just published in the Columbia Law Review, I offer new answers by suggesting that if the corporate form mattered at all in Anglo-American legal history, it was not for the reasons we have long supposed. Based on a new examination of historical legal sources from the late Middle Ages to the middle of the twentieth century, I show that the basic powers of the corporate form were also available throughout most of modern history through an underappreciated but enormously important legal device known as the common law trust. The trust’s success at mimicking the corporate form meant that the corporate form was almost never the exclusive source of the legal features that have long been considered its key contribution to modern life.