Recent research reveals that the joint stock corporation was not a superior form of business organization in many countries historically. In Japan, however, it played a more fundamental role. Between 1896 and 1939 joint stock enterprises accounted for 44 percent of registered businesses and 80 percent of total capital. From 1922 to 1939 joint stock enterprises outperformed limited and unlimited partnerships by ROE and generated 94 percent of aggregate profits. External finance factors, Japan’s development phase, industrial structure, public policy and culture determined high joint stock usage. When the private limited liability company was introduced in 1938, it did not displace the joint stock form.