The document outlines the history and development of company law in England from the pre-14th century to the 19th century. It discusses early forms of business associations like sole proprietorships, partnerships, commendas, and societas. It then describes the emergence of regulated companies, joint stock companies, and the bubble era of the 17th century. Key acts that shaped company law included the Bubble Act of 1720, Trading Companies Act of 1834, Limited Liability Act of 1855, and the Companies Act of 1862, which introduced concepts like the memorandum and articles of association that are still used today.
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The document outlines the history and development of company law in England from the pre-14th century to the 19th century. It discusses early forms of business associations like sole proprietorships, partnerships, commendas, and societas. It then describes the emergence of regulated companies, joint stock companies, and the bubble era of the 17th century. Key acts that shaped company law included the Bubble Act of 1720, Trading Companies Act of 1834, Limited Liability Act of 1855, and the Companies Act of 1862, which introduced concepts like the memorandum and articles of association that are still used today.
The document outlines the history and development of company law in England from the pre-14th century to the 19th century. It discusses early forms of business associations like sole proprietorships, partnerships, commendas, and societas. It then describes the emergence of regulated companies, joint stock companies, and the bubble era of the 17th century. Key acts that shaped company law included the Bubble Act of 1720, Trading Companies Act of 1834, Limited Liability Act of 1855, and the Companies Act of 1862, which introduced concepts like the memorandum and articles of association that are still used today.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
The document outlines the history and development of company law in England from the pre-14th century to the 19th century. It discusses early forms of business associations like sole proprietorships, partnerships, commendas, and societas. It then describes the emergence of regulated companies, joint stock companies, and the bubble era of the 17th century. Key acts that shaped company law included the Bubble Act of 1720, Trading Companies Act of 1834, Limited Liability Act of 1855, and the Companies Act of 1862, which introduced concepts like the memorandum and articles of association that are still used today.
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Matric No: 070601188 Course Code: CIL501
Course Title: Company Law
Continuous Assessment: History of Company Law
1. What were the basic vehicle of commerce in pre 14th Century England The basic vehicles of commerce in pre 14th Century England are Sole Proprietorship and Partnership as earlier practiced by guild of merchant.
2. What is a Commenda? This was a cross between a partnership and a loan whereby a financier advanced sum of money to the active trader upon terms that he should share in the profits of the enterprise, his position being similar to that of a sleeping partner but with no liability beyond that of the capital originally advanced.
In other words, a contract in which one party invested his labour and the other invested his capital. The venture is financed entirely by the by the investing partner; traveling partner did supply capital, but he had to run the risk of a dangerous sea voyage.
3. What is a Societas? This is a more permanent form of association which developed into present-day partnership, each partner being an agent of the others and liable to the full extent of his private fortune for partnership debts. Societas merely created rights and duties for the parties to the relevant contract. Any third party who made a contract with a partner in a societas would be denied access to the others’ assets, even if they had expressly approved of the contract with the third parties in question. In other words there is no privity of contract but parties are affected.
4. What is Regulated Company?
Regulated Company was an extension of the guild principle into foreign sphere where each member traded with his own stock and on his account but subject to obeying the rules of the company. This was the first set of association which was chartered largely because of the need to acquire a monopoly of trade for members of the company and government power over the territory for the company itself. The partnership principle of trading on joint stock was also adopted by regulated company which became joint commercial enterprises instead of trade protection associations.
5. What is Joint Stock Company?
This involved the internal establishment of a structure whereby members, described as “adventurers”, contributed capital and derived profits from the activities of the company on the basis of the number of shares held in a similar way as was the case with partnerships. The emergence of the joint stock company during the 16th century occurred as foreign trade expanded to newly discovered part of the world and incorporation and trade monopolies were granted by Royal Charter to those who furthered government policy by equipping the navy, establishing colonies or discovering new trade routes. Its evolution can be seen in the early years of the East India Company which was granted a charted in 1600. 6. Outline the features of Bubble Era in the development of Company Law - the bubble was about the frenzy between the business communities to have a commercial vehicle with semblance of a company - Though a partnership but a resemblance of a corporation either with an Act of Parliament or with a Royal Charter. - The bubble was also viewed by the apparent profitability or affluence occasion by those who subscribed to the stock of the early trading companies. - The bubble was taking advantage of by persons that could be described as unscrupulous promoters of the gullibility of the investing public and designed schemes the sole purpose of which is to hoodwink members of the public to part away with their capital. - Varieties of bubble companies without a Royal Charter or Act of Parliament were promoted. - They also obtained a moribund charter to form an entity by fraudulently altering it as if they where beneficiaries of those charters. - They rent an inn as their office. - These promoters would mention the name of notable members of the cities as being personages. - This led Parliament to respond and enact the Bubble Act 1720
7. Outline the main effect of the Bubble Act 1720
- The Act provided that organizations which “presumed to act as a corporation” or which issued transferable shares were public nuisance and illegal and imposed criminal liability for breach of the Act. - In other words, the effect is as summarized in the full title as “An Act to Restrain the Extravagant and unwarrantable Practice of Raising Money by Voluntary Subscriptions for Carrying on Projects Dangerous to the Trade and Subjects of this Kingdom”.
8. How is a Deed of Settlement relevant to post Bubble Act Companies?
- The Deed of Settlement is as a result of creativity of lawyers to make unincorporated association to operate with the advantages of incorporation using the Equity Principle of the law of Trusts. - The Deed of Settlement officially vest the property in the stock that is contributed in the trustee as the governor or manager which provides a sort of relationship between the trustee and the outside world and the relationship between the trustee and the contributors of the stock. - It provide for the address, the rights of the stock brokers or contributors to remove the trustee, rights of the stockbrokers to hold a meeting ones or twice annually, the rights of the trustees and the stockbrokers etc
9. Outline the main features of Trading Companies Act 1834
- The act extended the Crown’s powers under the 1825 Act so that some incidents of corporate personality, especially the capacity to sue and be sued in the company name, could be granted to non-chartered unincorporated associations. - The Crown also can granted lesser charter which is called “Letters Patent”. - In addition liability of members might be limited by the Crown, but the Crown adopted stringent conditions of its own that had to be met by associations seeking the privileges. 10. Outline the main features of Limited Liability Act 1855 - The Act provide for the limited liability of the members of company on complete registration if a) The company had at least 25 members holding £10 shares paid up to the extent of 20 per cent b) Not less than three-fourths of the nominal capital was subscribed, c) “Limited” was added to the company’s name, and d) The Board of Trade approved the auditors. - It conferred limited liabilities on all companies except Insurance companies and banking companies.
11. Outline the main features of the Companies (Consolidation) Act 1862 - It is the first enactment to bear the title of Companies Act - The Memorandum and Articles of Association form integral part for the formation of a limited liability company. - A company could be formed with liability limited by guarantee - Any alteration in the object clause of the memorandum is prohibited. - Provisions for winding up of company was introduced.
A Short View of the Laws Now Subsisting with Respect to the Powers of the East India Company
To Borrow Money under their Seal, and to Incur Debts in
the Course of their Trade, by the Purchase of Goods on
Credit, and by Freighting Ships or other Mercantile
Transactions
David Nisenbaum vs. American Apparel, American Apparel Retail, American Apparel LLC, American Apparel Manufacturing, American Apparel Corporation, CASE BC579342, April 20, 2015
