- Joint Stock Companies Act 1844
Before the Act, incorporation was only possible by
Royal charteror private act, and was limited owing to Parliament's jealous protection of the privileges and advantages thereby granted. As a result, many businesses came to be operated as unincorporated associations with possibly thousands of members. Any consequent litigationhad to be carried out in the joint names of all the members and was impossibly cumbersome. Though Parliament would sometimes grant a private act to allow an individual to represent the whole in legal proceedings, this was a narrow and necessarily costly expedient only allowed to established companies.
The 1844 Act created a
Registrar of Joint Stock Companies, empowered to register companies by a two-stage process. The first, provisional, stage cost £5 and did not confer corporate status which arose after the completing the second stage for another £5. [Mayson "et al." (2005) p. 6.]
However, there was still no
limited liabilityand company members could still be held responsible for unlimited losses by the company. ["Re Sea Fire and Life Assurance Co., Greenwood's Case" (1854) 3 De GM&G 459] Limited liability was subsequently introduced by the Limited Liability Act 1855. The system of registration was revised by the Joint Stock Companies Act 1856 which introduced the system largely still in operation as of 2006. The aim of the act was to place business and economy on a surer foundation, and to increase public confidence in the honesty of business.
*cite book | author=Harris, R. | title=Industrialising English Law: Entrepreneurship and Business Organisation, 1720–1844 | location=Cambridge, UK | publisher=Cambridge University Press | year=2000 | id=ISBN 0-521-66275-3
*cite book | author=Hunt, B.C. | title=The Development of the Business Corporation in England, 1800–1867 | location=Cambridge, MA | publisher=Harvard University Press | year=1936
*cite book | author=Mayson, S.W "et al." | year=2005 | title=Mayson, French & Ryan on Company Law | publisher=Oxford University Press | location=London | id=ISBN 0-19-928531-4
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