The introduction of limited liability in nineteenth century England

In this paper I have analysed the development of company law from 1720 through to 1857. During this long period of time, company law assumed the characteristics it has now. At the starting point, company law stood with incorporation granted by the Crown or Parliament on one side and partnership regulated by common law on the other. The development of the modern corporation needed the definition of what were the problems connected to the fact that a firm is run in association and what is the legal framework that allows to solve efficiently with the lowest costs these problems. In this paper I show that the introduction of limited liability gets its meaning from the exact definition of many other aspects of company life, such as bankruptcy procedures, directors’ power and responsibility, shareholders rights, publicity regime for company acts. Accordingly it’s shown that the introduction of the limited liability regime can’t be studied in isolation and it was just the last step in a complex development process.