Capital, I argue in ‘The Code of Capital: How the Law Creates Wealth and Inequality’, is coded in law.1 Legal coding is a process that adapts and molds formal law over time, often without explicit ex ante sanctioning by a legislature or a court. Several characteristics of formal law make it susceptible to coding, including its inherent incompleteness, the strong endorsement for private autonomy, and decentralised access to a state’s consolidated means of coercion.2 Would a progressive European Code of Private Law (EPL-code), as proposed by Hesselink, alter any of this and what would it take to ensure that the principles enshrined in this code would in fact be realised? These are the questions I will address in this short essay.

Lower barriers of entry for new firms and more flexibility in structuring a business organisation are the two key factors motivating the introduction of the new company law. In general, policymakers use new company law initiatives to encourage entrepreneurship, innovation and cooperative arrangements. This paper distinguishes the diverse strands of company law reforms arising in the United States, Europe and Asia and points to the underlying conditions that shape the markedly different reform outputs. Our analysis points to three important factors – (1) private ordering; (2) fiscal transparency; and (3) limited liability – that effect the incentives for new firm creation. However, we find that many of the new company law reforms are incomplete. Nevertheless, these new company law reforms retain the ability to generate rents due to their adaptability and responsiveness to social and economic change.