History of Company Law
Learning Objectives
At the end of this chapter, students will be able to:
1. Explain the concept of the corporation
2. Outline the development of company law in England and Australia
3. List the various types of corporation
4. Describe the Corporations Law scheme.
5. Outline the recent reform of company law in Australia
6. Explain the need for the introduction of the Corporations Act 2001
Chapter 1
Historical Development of Company Law
Chapter Summary
1 THE CONCEPT OF THE CORPORATION
A corporation is a body created by law, with its own legal status, and continues to exist despite changes to the individuals it represents. It can sue and be sued in its own name.
1 HISTORY OF COMPANY LAW IN ENGLAND
The Companies Act 1862 formed the basis of company law in Australia prior to federation in 1901.
The concept of the corporation in English law has existed since the first half of the fourteenth century, with the English monarch conferring corporate personality upon monasteries and municipal councils.
1.1 Guilds
The next type of corporation developed in the field of commerce, where Royal charter created corporations under which guilds or associations of particular types of merchants operated. Members obtained a monopoly over the trade covered by the guild, but the guild itself did not obtain any rights or liabilities following incorporation. It merely provided rules within which members had to operate, and each member traded individually (and hence had no limited liability).
1.2 Joint Trading
Joint trading was possible through the use of two types of partnership: the commenda and the societas. In a commenda, a financier provided the trader with a loan and in return received an agreed share of the trading profits. The societas operated on a similar basis to the modern form of partnership. Each partner was an agent of the other partners and each partner was personally liable for the partnership debts.
1.3 The first
At the end of this chapter, students will be able to:
1. Explain the concept of the corporation
2. Outline the development of company law in England and Australia
3. List the various types of corporation
4. Describe the Corporations Law scheme.
5. Outline the recent reform of company law in Australia
6. Explain the need for the introduction of the Corporations Act 2001
Chapter 1
Historical Development of Company Law
Chapter Summary
1 THE CONCEPT OF THE CORPORATION
A corporation is a body created by law, with its own legal status, and continues to exist despite changes to the individuals it represents. It can sue and be sued in its own name.
1 HISTORY OF COMPANY LAW IN ENGLAND
The Companies Act 1862 formed the basis of company law in Australia prior to federation in 1901.
The concept of the corporation in English law has existed since the first half of the fourteenth century, with the English monarch conferring corporate personality upon monasteries and municipal councils.
1.1 Guilds
The next type of corporation developed in the field of commerce, where Royal charter created corporations under which guilds or associations of particular types of merchants operated. Members obtained a monopoly over the trade covered by the guild, but the guild itself did not obtain any rights or liabilities following incorporation. It merely provided rules within which members had to operate, and each member traded individually (and hence had no limited liability).
1.2 Joint Trading
Joint trading was possible through the use of two types of partnership: the commenda and the societas. In a commenda, a financier provided the trader with a loan and in return received an agreed share of the trading profits. The societas operated on a similar basis to the modern form of partnership. Each partner was an agent of the other partners and each partner was personally liable for the partnership debts.
1.3 The first