Abstract: Based on the idea of risk aversion from Alchain’s we think that the firm’s forming and developing is originated from the motivation to averse the risk of all the players furthermore. We corrected the risk neutral or risk loving assumptions of the firm, entrepreneur and capitalist to obtain consistency with the assumption of economic (or rational) person, and proved that the motivation of risk aversion induced the firm’s forming and developing.Then we analyzed the history of the firm’s forming, development of present days and organizational types as the evidences. The risk propositions or theory in the paper also have wide application in study of financial economics and assets pricing theory.

Key words: firm, owner of the property, owner of the human capital, risk, risk aversion, risk shift and share