The Autonomous Global Enterprise: On the Role of Organizational Law Beyond Asset Partitioning and Legal Personality

Abstract

Today, an economic enterprise can insulate its assets within itself. It can disperse its assets among enterprises, each an independent juridical person. It can exist independent of its shareholders. It can own itself. It can exist independent of the regulation of any singular political community. It can choose the set of regulations to which it wishes to subject clusters of assets. It can regulate itself. For the economic enterprise able to disperse assets and operations worldwide, for the enterprise that can access capital markets throughout the globe, the essential role of law of economic organizations appears to be to enhance the ability of the multinational economic enterprise to become an autonomous and self regulating entity. This short essay serves as an introduction to the construction of a theory of institutional autonomy from out of a century of debate about the nature of economic entities. The essay first re-examines the asset partitioning ideas of Hansman and Kraakman the context of the multinational enterprise. It suggests that asset partitioning can be usefully understood as fleshing out the contours of the way in which organizational law shapes enterprise autonomy for creditors. The essay then re-examines the corporate personality analysis of Iwai to suggest that in a global context, Iwai's insights suggest the possibility of enterprise autonomy from shareholders. The essay then considers the perverse utility of the ancient territorial principle and the principle of regulatory hierarchy. Applied in a global context these principles suggest the possibility of enterprise autonomy from the state. Pulling these three puzzle pieces together, the essay suggests that the nexus of multinational enterprises and globalization provides a foundation for the emergence of self-conscious autonomous self-regulating economic entities.

Keywords: asset partitioning, limited liability, multinational corporations, regulation, comparative law

JEL Classification: F02, F23, G38, K22, Z10