We now move from common law into civil law. Firms generally take one of three forms: corporation, partnership, or sole proprietorship. There exists a variety of additional options, such as a syndicate, limited partnership, and other corporate structures. While the vast majority of enterprises operating in any country are organized as sole proprietorships, most individuals are employees of corporations and the majority of market transactions are conducted by corporations. In this chapter, we will examine firm organization, their economic reasons, and delve specifically into corporate law since this organizational form is the most important to the economy writ large.
Key Economic Concepts