In this Article we discuss how U.S. entity law has evolved in recent decades so that (i) limited liability has become available to the owners of any form of business organization, and (ii) all forms of business organizations are now seen as having the status of entities separate from their owners. Those changes have occurred without significant consideration of their consequences or what they mean for the public policies underlying entity law. At the same time, there is an increasing awareness by businesses that promotion of social benefits and/or reduction of externalities is in the firm’s best interests. There has recently been development of hybrid business models, but they have been driven by pragmatic concerns rather than an understanding of the theoretical underpinnings for, and restrictions on, those models. This Article strives to point the way toward a new understanding of how the state should frame the requirements for limited liability and separate entity status.