Whether and how to recognize business enterprises as organizational "entities" and legal "persons" that bear enforceable rights, privileges, and responsibilities has been one of the most vexing issues in the history of legal thought. These issues, though often raised with respect specifically to corporations, are relevant to business firms in general.1 Debates about whether business firms are simply "legal fictions" created by the state or "real entities" that exist independently as institutions trace at least to classical Roman times.2 These debates mirror an historical tension between "topdown" and "bottom-up" perspectives on business enterprises. An appreciation of these two perspectives helps to explain and resolve the differences among the main competing legal theories of the firm.