One of the most far-reaching consequences of the industrial
revolution was the introduction of the limited liability company/ the first
such was registered at company’s house in 1856 and this, in essence, signaled
the final, formal, split between ownership and control.
revolution was the introduction of the limited liability company/ the first
such was registered at company’s house in 1856 and this, in essence, signaled
the final, formal, split between ownership and control.
Prior to the companies act 1856 many ventures had
been financed through the medium of the joint stock company formed-such as the
Hudson’s bay company formed in 1670 and the East India company formed in
1600-whereby a group of investor financial a venture using a joint stock
company managed by an elected board of directors. However, to do this required
a royal charter or an act of parliament. The great advantage of using these
companies was, of course, limited liability, the great disadvantage being the
cost and the ponderous process of setting them up. Only the wealthy could
afford to do this.
been financed through the medium of the joint stock company formed-such as the
Hudson’s bay company formed in 1670 and the East India company formed in
1600-whereby a group of investor financial a venture using a joint stock
company managed by an elected board of directors. However, to do this required
a royal charter or an act of parliament. The great advantage of using these
companies was, of course, limited liability, the great disadvantage being the
cost and the ponderous process of setting them up. Only the wealthy could
afford to do this.
The right of anyone to set up a company with
limited liability, which was introduced in 1856, signified the creation of the
modern company. The law and regulations which have grown up around it to
regulate its actions and the actions of its members and managers stem from
these nineteenth-century origins.
limited liability, which was introduced in 1856, signified the creation of the
modern company. The law and regulations which have grown up around it to
regulate its actions and the actions of its members and managers stem from
these nineteenth-century origins.
Whilst the modern company came into being in 1856,
the audit profession came somewhat later, it was not until the company’s act
1900 that an obligation to produce annual accounts was placed on the directors
of companies.
the audit profession came somewhat later, it was not until the company’s act
1900 that an obligation to produce annual accounts was placed on the directors
of companies.
