Ten Theses on the Firm As a Democratic Institution
Abstract: The paper contributes to revising the notion of the firm by a)reconstructing the conditions in which the constitution of an entity may be necessary for conducting economic action; b) showing that such an entity can be established by an agreement or contract associating and dedicating partners and/or assets (in most Civil Law countries called a contract of ‘societas’); and c) arguing that such an entity, as any legally recognized association, in modern constitutional democratic legal orders, is bound to be governed according to democratic principles and procedures. Different types of firms differ according to who are the principals in the democracy, and whether the ‘societas’ is a society of assets or of people. Those theses allow to derive some other relevant implications of the nature and governance of the firm (for example, the irrelevance of the objectives pursued, and the intrinsic relevance of responsibility toward third parties, for defining a firm). The whole set of propositions is exposed in ‘ten theses’.
