Volume 8 Autumn, 1958 Number 1 The Student Brandeis University College of the Holy Cross Body: I958 Brigham Young University Hope College University of British Columbia College of Idaho of Idaho The current student of the Law School is made Brooklyn College University body Brown University Illinois College of residents of a and up great many states, graduates Cairo University (Egypt) Illinois Institute of Technology of an even larger number of universities and colleges. University of California University of Illinois The total enrollment of 352 includes students who Calvin College Indiana University Carleton College Johns Hopkins University make their homes in the states: following University of Chicago University of Kansas The Citadel Kent State University Alabama Michigan City College of San Francisco Kenyon College Alaska Minnesota Clark Junior College Knox College Arizona Missouri Coe College Lake Forest College California Montana Colby College Lawrence College Colorado Nebraska Colgate University University of Leiden (Nether- Connecticut New Jersey University of Colorado lands) Delaware New York Columbia University London School of Economics District of Columbia North Carolina University of Connecticut Louisville Municipal College . Florida Ohio Cornell University Loyola University (Chicago) Georgia Oregon Dartmouth College Macalester College Idaho Pennsylvania Davidson College University of Maine Illinois Rhode Island Denison University University of Marburg Indiana South Dakota DePaul University (Germany) Iowa Tennessee DePauw University Marquette University Kansas Texas University of Detroit Maryville College Utah Kentucky Drew University Massachusetts Institute of Maine Virginia Duke University Technology Washington Maryland Earlham College University of Melbourne Massachusetts Wisconsin Elmhurst College ( Australia) Emory University � lercer University also are and Represented Hawaii, Australia, Canada, Fisk University University of Miami Egypt, England, Germany, Iraq, Israel, Scotland, University of Frankfurt Michigan State University Switzerland and Yugoslavia. Counting the District of (Germany) University of Michigan University of Freiburg Middlebury College Columbia, students of the School come from 38 states. (Gennany) Miles College Exactly one-fourth are from the city of Chicago; one­ Gateshead Talmudical College Millikin University fifth are from the College of the University of Chicago. University of Geneva Law University of Minnesota School (Switzerland) University of Missouri The current entering class was selected from the larg­ George Washington University Montana State University est number of in the of the School. applications history Georgetown University Morton Junior College The one hundred eighty-nine colleges and univer­ Gettysburg College Mount Holyoke College sities represented in the student body are: University of Graz (Austria) University of Munich Grinnell College (Germany) Johannes Gutenberg Univer- University of Munster Aberdeen University Bard College sity (Germany) (Germany) University of Alabama Barnard College Hamilton College National University of Mexico Albion College Beloit College University of Nebraska American University University of Beograd Hampton-Sydney College of New Amherst College (Yugoslavia) Harvard University University Mexico New York Antioch College University of Bern (Switzer- Haverford College University Augustana College land) University of Hawaii Niagara University Baghdad Law College (Iraq) Birmingham Southern College Hertz Junior College University of North Carolina Balliol College, Oxford Boston University Hobart College University of North Dakota University Bowdoin College Hofstra College North Park Junior College .2 The Laic School Record Vol. 8, No.1 University of North Stafford- Stanford University The shire (England) University of Stockholm Philosophy of Northwestern University Swarth more College Statutes University of Notre Dame Syracuse University l\;lidcentury Corporation Oberlin College Talladega College Ohio State University Temple University by WILBER C. KATZ Ohio of Tennessee Wesleyan University University Parker Hall Professor of Law, The University of Omaha University of Texas James University University of Oregon Texas Western University of Chicago Law School. Our Lady of Providence Sem- University of Toledo inary University of Toronto Reprinted by permission from Law and Contemporary Oviedo University Trinity College, Cambridge Problems, published by the Duke University School of University of Paris University Law, Durham" North Carolina. 19.58, University of Pennsylvania Trinity College (Connecticut) Copyright, Pennsylvania State University University of Tubingen hy Duke University. Pepperdine College (Germany) I of Tufts University Pittsburgh College In the "New Look" title for this the Pomona College University College of London symposium, Portland State College Valparaiso University Editor suggests a tempting figure of speech concerning Princeton University Vanderbilt University fashions in corporation laws. He invites contributors Providence College University of Virginia to examine the models now on and to describe Purdue University Wabash College display Queens College of the City of Washington State College what it is that constitutes the "new look." It might New York Washington University be entertaining to see how far one could spin out the Reed College (St. Louis) fashion-show uninhibited commentator Ripon College University of Washington analogy. (One University of Rochester Wesleyan University has, indeed, suggested that the contours of the Roosevelt University Western Reserve University American Bar Association's Model Business Corpora­ Rutgers University \Vheaton College tion Act make it a seductive invitation to Saint John's Seminary Whitman College irrespon­ Saint Joseph's College Williams College sibility.") My pen, however, is too heavy for such Saint Wilson Teachers Mary's College (Cali­ College a task; and the Editor has used the term "philosophy" fornia) University of Wisconsin in What is from I Saint Mary's of the Lake Sem- Wittenberg College defining my subject. expected me, inary Woodrow Wilson City College take it, is a discussion of contemporary theories con­ Saint Olaf College Woodstock College cerning the purposes of corporation statutes and the Shimer College College of Wooster for the of those University of the South Wright Junior College provisions appropriate accomplishment South Dakota State College Xavier University (Ohio) purposes. In trying to meet this assignment, it seems Southern Illinois University Yale University most promising to look not for theories embodied in Southern Methodist University Yeshiva University toto in particular statutes, but for theories reflected in various statutes in different degrees and proportions. The general purpose of incorporation statutes is to provide a particular legal mode for the organization of business enterprise. If we are to try to be "philo­ sophical," we must begin at the beginning; we must begin with the concept of business enterprise and the functicn of the law of business organization. For our purposes, analysis of the concept of enterprise discloses three elements: risk, control, and profit. Problems of business organization are problems in the allocation of these elements among the parties to the enterprise. The law of business organization (agency, partner­ ships, corporations) is principally concerned with (1) defining the area within which parties are free to allo­ cate risk, control, and profit as they wish, and (2) prescribing the allocation of these elements in the absence of express agreement. I shall be interpreting the general problem of cor­ porate legislation as a problem in regulating the allocation of these elements of enterprise so as to promote responsibility 'of investment and manage­ ment. In the simplest type cf business unit, the un­ incorporated one-man enterprise, no such problem 'Vilbel' C. Katz, [ames Parker Hall Projessor of Laio. arises. Risk, control, and profit are concentrated in the.