The Uncorporation’s Domain

Abstract

This Article describes firms’ current choice between the corporate and uncorporate governance forms. This choice depends on firms’ demand for flexibility, the effectiveness in particular situations of corporate-type monitoring, and the suitability of uncorporate mechanisms of controlling agency costs. The Article suggests that, although the corporation likely will continue to be important for many large firms, uncorporate business forms are likely to become more important for a wide variety of firms. Tax, regulatory, and economic developments will determine the speed but not the existence of the trend.

JEL Classification: G24, K22