Keeping Better Company
Corporate Governance Ten Years On

Keeping Better Company
Corporate Governance Ten Years On

Keeping Better Company
Corporate Governance Ten Years On

ompanies are not the only way of organizing business activity. Partnerships
of various kinds have their place—as well as their limitations. This book
willingly acknowledges their use but does not cover them. Its scope is
confined to what is sometimes called a ‘joint stock company’—which has
a pleasant historical ring to it, but I prefer the term ‘limited liability
company’—as it better reflects probably the most important feature of the
modern company world. Many countries developed upon similar lines (and
this is covered in subsequent chapters). I use the UK as an example and
because it was early in the field.
In the UK this world starts in the mid-nineteenth century. There are
companies in many parts of the world including Great Britain older than
that, but the Act of 1855 provides the first successful introduction of a law
which makes incorporation easy and limits the liability of those who risk
their savings in an enterprise to the money they have invested. Eleven years
earlier in 1844, the UK Parliament had passed a law which made incorporation
easy but left shareholders with the residual liability if the business
failed. It did not work—investors were not prepared to risk their entire
fortunes for a few shares.

jonathan p. charkham
with hØlŁne ploix