Companies didn't start having a purpose to be good—they did it to pay the King.
April 17, 2026
Original Paper
The Asking Price of Incorporation: State Leverage and the Evolution of Corporate Purpose
SSRN · 6580099
AI-generated illustration
The Takeaway
Today, we talk about 'corporate purpose' as a social contract or a moral choice by founders. But historical records from the UK show it actually started as a mandatory fee. In exchange for the privilege of becoming a corporation, the Crown forced companies to declare a 'purpose' that served the state's interests. It was an 'asking price' for the right to exist, not a noble mission. This reveals that the very DNA of the modern corporation is rooted in state leverage, not social altruism. It changes how we view the 'meaning' of a business from a moral choice to a historical debt.
From the abstract
This article advances a new perspective on corporate purpose, grounded in the institutional conditions under which corporate privileges are granted. Using a novel dataset of historical UK royal charters and a mixed-methods empirical strategy, the study shows that early corporations articulated specific, enforceable, and public facing purpose clauses because incorporation was a scarce privilege that allowed the Crown to impose obligations as a “asking price” for the benefits of the corporate form