Economic Prosperity through a Balanced Formalism Approach in Public Joint-Stock Companies

Abstract

In this article, we seek to address these fundamental questions: Does excessive formalism in commercial law, particularly within public joint-stock companies, hinder economic prosperity and public participation? And how can a prudent balance be established between structural requirements and the freedom of individual will? Our main claim is that balanced formalism — which simultaneously considers the structural and operational aspects of companies — not only reduces the excessive dominance of the state over the economy but also provides a regulated framework for attracting both small and large investments, stimulating production, and realizing social justice. For instance, Iran’s current Commercial Code, with its restrictive and formalistic approach, has inadvertently served state-controlled economic mechanisms instead of empowering the private sector. We argue that legal reform, pursued through deliberate legislation and grounded in collective wisdom, can overcome radical structural constraints and, by reducing redundant formalities, create a space for the free and creative will of individuals to flourish in the economic arena. Consequently, achieving sustainable economic prosperity depends on a transition from rigid formalism toward a balanced model in which form and substance jointly serve higher objectives such as collective wealth creation and social advancement.