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 is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprem ...
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, b ...
or
private Act 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 association
Unincorporated associations are one vehicle for people to cooperate towards a common goal.
The range of possible unincorporated associations is nearly limitless, but typical examples are:
:* An amateur football team who agree to hire a pitch onc ...
s with possibly thousands of members. Any consequent
litigation
-
A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil act ...
had to be carried out in the joint names of all the members and was almost impossibly cumbersome. Though Parliament would sometimes grant a private act to allow an individual to represent the whole in legal proceedings, this was a narrow and necessarily costly expedient, allowed only to established companies.
The 1844 Act created the
Registrar of Joint Stock Companies, 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 liability is limited to a fixed sum, most commonly the value of a person's investment in a corporation, company or partnership. If a company that provides limited liability to it ...
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 well a ...
. 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, recognised as the founding piece of modern United Kingdom company law legislation.
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.
See also
*
Bubble Act 1720
The Bubble Act 1720 (also Royal Exchange and London Assurance Corporation Act 1719) was an Act of the Parliament of Great Britain passed on 11 June 1720 that incorporated the Royal Exchange and London Assurance Corporation, but more significant ...
*
Companies Act
Companies Act (with its variations) is a stock short title used for legislation in Botswana, Hong Kong, India, Kenya, Malaysia, New Zealand, South Africa and the United Kingdom in relation to company law. The Bill for an Act with this short title ...
*
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 well a ...
*
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, recognised as the founding piece of modern United Kingdom company law legislation.
Overview
Unlike other ...
*''
Utopia, Limited''
Notes
Bibliography
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1844 in law
United Kingdom Acts of Parliament 1844
History of corporate law
United Kingdom company law
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