THE LEGAL STATUS OF NON-PROFIT CORPORATE ORGANIZATIONS IN FOREIGN COUNTRIES
Abstract
Becoming a shareholder has never implied unlimited liability—even prior to the enactment of the Limited Liability Act of 1855. Although shareholders in 18th-century companies generally did not enjoy limited liability, due to the nature of contractual relations, they were typically not directly liable for the company’s debts to third parties.
References
1. Edmunds v Brown and Tillard (1668) 1 Lev 237, 83 ER 385 (KB); and Salmon v The Hamborough Co (1671) 1 Ch Cas 204, 22 ER 763 (HL).
2. LCB Gower and others Gower’s Principles of Modern Company Law (4th ed, Sweet and Maxwell, London, 1979) at 25–26 (footnotes omitted).
3. J B Jefferys “The Denomination and Character of Shares, 1855-1885” Economic History Review XVI (1946) 1, reprinted in E M Carus-Wilson (ed) Essays in Economic History (Edward Arnold, London, 1954) 347.
4. (10 August 1853) 129 GBPD HC 1598–1599 states: “There was power in special cases for the Queen in Council to grant charters with limited liability. The practice with respect to these charters was this: They were sent to the Committee of Privy Council for Trade.
5. Waugh v Carver (1793) 2 H BL 235, 126 ER 525.
6. See the discussion of the relatively short duration of unlimited liability in England in (27 June 1854) 134 GBPD HC 752–775 per Mr Collier 752-760.
7. See Limited Liability Act 1855 (UK) 18 & 19 Vict c 133
8. See Joint Stock Companies Act 1856 (UK) 19 & 20 Vict c 47.
9. J H Clapham An Economic History of Modern Britain (2nd ed, Cambridge University Press, Cambridge, 1930-1938) vol 2 at 138.
10. The Economist (1 July 1854, online at Gale Cengage Economist Historical Archive) at 699.
11. Clapham, above n 58, vol 2 at 360-361, vol 3 at 206-207. Clapham’s source is the evidence of a David Chadwick, a leading “financial agent”, given to a select committee in 1877.
