The Joint Stock Companies Act 1844 ( 7 & 8 Vict. c. 110) was an act of the

Parliament of the United Kingdom The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body of the United Kingdom, and may also legislate for the Crown Dependencies and the British Overseas Territories. It meets at the Palace ...

that expanded access to the incorporation of joint-stock companies. Before the act, incorporation was possible only by

royal charter A royal charter is a formal grant issued by a monarch under royal prerogative as letters patent. Historically, they have been used to promulgate public laws, the most famous example being the English Magna Carta (great charter) of 1215, but ...

private act Proposed Bill (proposed law), bills are often categorized into public bills and private bills. A public bill is a proposed law which would apply to everyone within its jurisdiction. A private bill is a proposal for a law affecting only a single p ...

and was limited owing to Parliament's protection of the privileges and advantages thereby granted. As a result, many businesses came to be operated as

unincorporated associations A voluntary group or union (also sometimes called a voluntary organization, common-interest association, association, or society) is a group of individuals who enter into an agreement, usually as volunteers, to form a body (or organization) to ac ...

, with possibly thousands of members. Any consequent

litigation A lawsuit is a proceeding by one or more parties (the plaintiff or claimant) against one or more parties (the defendant) in a civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. ...

had to be carried out in the joint names of all the members and was almost impossibly cumbersome. Parliament would sometimes grant a private act to allow an individual to represent the whole in legal proceedings, but that was a narrow and necessarily costly expedient, which was allowed only to established companies. The 1844 act created the Registrar of Joint Stock Companies, which was empowered to register companies by a two-stage process. The first, provisional, stage cost £5 () and did not confer corporate status, which arose after completing the second stage for another £5. However, there was still no

limited liability Limited liability is a legal status in which a person's financial Legal liability, liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company, or joint venture. If a company that provides limi ...

, and 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 Limited Liability Act 1855 ( 18 & 19 Vict. c. 133) was an act of the Parliament of the United Kingdom that first expressly allowed limited liability for corporations that could be established by the general public in England and Wales as wel ...

. The system of registration was revised by the

Joint Stock Companies Act 1856 The Joint Stock Companies Act 1856 ( 19 & 20 Vict. c. 47) was an act of the Parliament of the United Kingdom. It was a consolidating statute that was recognised as the founding piece of modern United Kingdom company law. Overview Unlike other ...

. 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.

Notes

Bibliography

* * * United Kingdom Acts of Parliament 1844 History of corporate law United Kingdom company law {{UK-statute-stub

See also

Notes

Bibliography