Development of Company Law in England
- It is argued that The Development of Company Law was started from England.
- The terms separate personality; limited liability and perpetual succession were developed in England before 17th
- England is the birth place of development of company law.
- The word ‘corporations’ are not novelties. Corporations were known as institutions since very ancient date.
First Phase: Before 1720 AD
- Even in ancient period there were a lot of institutions having separate legal personality in England. These institutions were incorporated through the Crown Charter.
- There were some institutions in trade or business sector. Such institutions were known as “Guilds of Merchant’’.
- “Guilds of Merchants” were not actually legal personality but some guilds of merchant were recognized by the crown charter. Such guilds of merchant had legal personality as modern company, but the word company had not used for such guilds of merchant.
Use of the term ‘Company’
- The traders, who generally traded in abroad, used the word ‘company’.
- East India Company was established in 1600A.D to provide trade monopoly in India.
- There was no clear distinction between unincorporated partnership and incorporated company.
Second Phase: 1720 to 1825 AD
- First Company Act: In 27 April 1720, the Bubbles Act 1720 was enforced to prevent the cheating in the name of company. This Act prohibited the companies of not having royal charter.
- Enterprises such as banking, insurance, irrigation, canals construction and water supply were permitted to be incorporated in the form of company.
- Deed of settlement was developed by lawyer presently known as Memorandum of Association.
- The term limited liability, separate personality were developed.
Third Phase: After 1825 to 1855 AD
- Trading Company Act 1834.
- Companies could be incorporated without Charter.
- Chartered Company Act 1837
- Joint Stock Company Act 1844 differentiated between Partnership and Joint stock Company.
- Limited liability Act 1855.
Modern Company law: 1855 to present time
- Limited liability Act was repealed by the new Act named Joint Stock Company Act 1856.
- The term MOA, AOA, Capital are defined clearly
- Companies Act 1862
- Companies’ Winding- Up Act 1890
- Directors Liability Act 1890
- Companies Act 1965
- Companies Act 1989
- Companies Act 2006