The Modernization of Corporation Law , 1920 - 1940

What forces shape corporation law? The basic framework that produces corporation law in the United States is readily apparent. Under the United States’ system of corporate law federalism, each state has the power to make its own laws concerning how corporations are to be governed, and a corporation may then select which state’s law will regulate its internal affairs by incorporating in that state, even if the corporation is based elsewhere. Identifying this framework does not, however, explain how such basic arrangements set in motion the complex processes that have over the past century produced modern corporation law. When explaining corporation law’s evolution, scholars have identified as overwhelmingly important a consequence of corporation law federalism: