Corporation

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Although some classes of companies are believed to have existed during Ancient Rome and Ancient Greece, the nearest recognizable ancestors of the present-day company did not develop until the 16th century. With increasing global trade, Royal licenses were imparted in Europe (notably in England and Holland) to trade adventurers. The Royal charters usually conferred special privileges on the trading company (including, regularly, some form of monopoly). Initially, traders in these entities traded stock on their own account, but later the members came to operate on joint account and with the joint stock, and the new Joint stock company was born. Early organizations were merely economic ventures; it was only a belatedly established benefit of holding the joint stock that the company’s stock could not be seized for the debts of any individual member. The development of company law in Europe was hampered by two famous “bubbles” (the South Sea Bubble in England and the Tulip Bulb Bubble in the Dutch Republic) in the 17th century, which set the expansion of companies in the two leading jurisdictions back by over a century in popular estimation. But companies, almost unavoidably, returned to the vanguard of commerce, although in England to bypass the Bubble Act 1720 investors had reverted to trading the stock of unincorporated connections until it was revoked in 1825. Now we move into the age when things are not as clear like when you need your toilet repair done by a professional. However, the cumbersome method of receiving Royal charters was simply inadequate to keep up with demand. In England, there was a lively trade in the charters of defunct companies. However, procrastination amongst the legislature meant that in the United Kingdom it was not until the Joint Stock Companies Act 1844 that the first equivalent of new companies, formed by registration, appeared. Soon after came the Limited Liability Act 1855, which in the event of a company’s bankruptcy limited the liability of all shareholders to the amount of capital they had invested. The beginning of modern business law came when the two pieces of legislation were codified under the Joint Stock Companies Act 1856 at the behest of the then Vice President of the Board of Trade, Mr. Robert Lowe. That bill quickly gave way to the railroad boom, and from there the numbers of companies formed soared. In the later nineteenth century depression took hold, and just as business numbers had expanded, many started to implode and fall into liquidation. Much high educational, legislative and judicial opinion was objected to the assumption that businesspeople could escape liability for their role in the dying businesses. The last meaningful development in the history of companies was the conclusion of the House of Lords in Salomon v. Salomon & Co. Where the House of Lords established the separate legal nature of the company, and that the accounts of the company were separate and distinct from those of its owners. In a December 2006 article, The Economist identified the development of the joint stock company as one of the key reasons why Western commerce moved ahead of its rivals in the Middle East in the post-renaissance era.