CIRJE-F-135. Iwai, Katsuhito, "The Nature of the Business Corporation--Its Legal Structure and Economic Functions", October 2001.

There is a fundamental difference in legal structure between the classical firm and the business corporation. While the former consists of a single ownership relation between owners and assets, the latter consists of two overlapping ownership relations �] one between shareholders and the corporation and the other between the corporation and corporate assets. The legal relation between shareholders and assets is indirect and only through the intermediary of the corporation that legally performs the dual role of a thing and a person. The main purpose of this paper is to show how such two-tier ownership structure of the business corporation has fundamental effects on the form of its organization, the ways and means of its governance, and the efficiency of its performances.