Joint Stock Companies.— Commercial companies are a comparatively modern creation in English law. The com mon law appears to have recognized no privileged associations except those which were incorporated by charter, or statute, or prescription. All other associations, no matter what their numbers or purpose, were mere assemblages of individuals. A trading association was at the best only a partnership, and between large partnerships and small partnerships there was no legal difference whatever. Each of the members was responsible for all the debts of the association, and all the members had to unite in instituting or defending any process of law. The inconvenience of such disabilities must have increased with the growth of trade. On the other hand, if the society applied to the Crown for a charter, and succeeded, it became a corporation, and the members were rendered irresponsible for its debts. What was wanted for trade was a society which might sue and be sued like a corporation, while its members remained personally liable for its debts. Joint-stock companies were regarded at first with great disfavour by the Legislature. In 1719 was passed the Bubble Act (6 Geo. I. c. 18). The first part of the Act, reciting the utility of the practice of assuring ships and lending money on bottomry, empowers the king to create by charter two corporations to deal in such ventures; and all assuring of ships, or lending of money on bottomry by any other corporation, partnership, or society, is made illegal. Private persons, acting for themselves, may still continue to underwrite policies and lend money. The Act then recites the growth of dangerous and mischievous undertakings and projects, wherein the undertakers and subscribers have presumed to act as if they were corporate bodies, and have pretended to make their shares transferable, and enacts that “all and every the undertakings and attempts described as aforesaid, and all other public undertakings and attempts tending to the common grievance, prejudice, and inconvenience of bis Majesty’s subjects, or great numbers of them, in their trade, commerce, or other lawful affairs; and all public subscriptions, receipts, payments, assignments, transfers, pretended assignments and transfers; and all other matters and things whatsoever, for furthering, countenancing, or proceeding in any*such undertaking or attempt; and more particularly, the acting or presuming to act as a corporate body or bodies, the raising or pretending to raise transferable stock or stocks, the transferring or pretending to transfer or assign any share or shares in such stock or stocks, without legal authority, either by Act of Parliament or by any charter from the Crown, to warrant such acting as a body corporate, or to raise such transferable stock or stocks, or to transfer shares therein; and all acting, or pretending to act, under any charter formerly granted from the Crown for particular or special purposes therein expressed, by persons who do or shall use, or endeavour to use, the same charters for raising a capital stock, or for making transfers or assignments, or pretended transfers or assignments, of such stock, not intended or designed by such charter to be raised or transferred; and all acting or pretending to act under any obsolete charter, become void by non-user or abuser, or for want of making lawful elections which were necessary to continue the corporations thereby intended, shall (as to all or any such acts, matters, and things, as shall be acted, done, attempted, endeavoured, or proceeded upon after the said 24th day of June 1720) for ever be deemed to be illegal or void, and shall not be practised or in wise put in execution.” And all such undertakings are to be deemed public nuisances. Although wholly powerless to prevent the growth of joint-stock companies, the Bubble Act was not repealed till 1825. The Bubble Act is supposed to have been passed in the interest of the famous South Sea Company. By 9 Anne c. 21 the Crown was empowered to incorporate the persons interested in the public debt, with certain privileges of trade on the South Seas. By 6 Geo. I. c. 4 the company thus created was authorized to increase its stock. The supposed advantages of the company turned out to be a delusion. In the meantime numberless other speculations of a similar character were started, and in many cases pretended to act under charters which were either obsolete or insufficient for the purpose. The South Sea Company prosecuted these adventurers under the Bubble Act, but while it succeeded in exposing their real character it also helped thereby to weaken public confidence in its own. For a period of nearly ninety years the Bubble Act remained inoperative, but at the end of that period several cases under it were brought into court (Collyer On Partnership). At the same time, by 6 Geo. IV. c. 91 the Crown was enabled to grant charters of incorporation under which members might be made responsible for the corporation’s debts. In 1834 the Crown was empowered to grant to companies by letters patent, without incorporation, the privilege of suing and being sued by a public officer. When a charter could not be obtained, companies might be incorporated, or empowered to plead by public officers, under special Acts of Parliament. For such corporate or quasi-corporate privileges application had to be made either to the Crown or Parliament. In 1826 banking companies were allowed to obtain the privilege of suing by public officer on complying with certain rules. In 1844, all companies (with some exceptions) were enabled to obtain a certificate of incorporation without applying for a charter or a special Act. Banking companies, however, were required to apply to the Crown for a charter. Members of companies thus created were still responsible, to the whole extent of their fortune, for the debts of the companies. In 1855 limited liability was introduced by 18 and 19 Vict. c. 133, shareholders being made responsible to the extent only of the amount of their shares. Companies with this privilege must use the word “limited” after their names. The dissolution and winding-up of insolvent companies remained to be simplified, and from 1846 to 1850 various measures were introduced, enabling different classes of companies to be wound up, without the usual process by bill to which the shareholders, as partners, necessarily had to appear. The legislative history of companies, thus briefly traced, exhibits their development out of simple partnerships in a not uninstructive manner. Partnerships in the eye of the law, they are looked upon by the Legislature as false pretenders to the character of corporations; they areat first denounced as nuisances, then tolerated, and gradually relieved one by one from those legal incidents of partnership which impede their functions in the organization of commerce. In 1862 a consolidation of the numerous Acts relating to companies was effected by the Act for the incorporation, regulation, and winding-up of trading companies and other associations, which ξave to the Court of Chancery exclusive jurisdiction in winding-up. The following are a few of the chief provisions of this important Act. It prohibits the formation of any company, association, or partnership, of more than ten persons for the business of banking, and of more than twenty persons for any business having for its object the acquisition of gain, unless it is registered under this Act. Companies, formed by Act of Parliament or letters patent, or engaged in mining within the jurisdiction of the stannaries, are exceptions. Or, as it may be otherwise stated, all associations for the acquisition of gain, other than those last mentioned, and excluding banking partnerships of fewer than ten, or other trading societies of fewer than twenty members, will be illegal unless registered under this Act. Any seven or more persons, joining together for the pursuit of any lawful object, may form an incorporated company by subscribing a memorandum of association and registering. The liability of members may be unlimited, or it may be limited to the amount unpaid of the nominal value of their shares, or to sums guaranteed. The memorandum of association must contain particulars as to the name, object, &c., of the proposed company; and companies limited by share or guarantee must use the word “limited” after their names. Companies limited by shares may, and other companies, whether limited by guarantee or unlimited, must also send articles of association, containing regulations for the management of the company. The Act contains in a schedule a table of regulations which may be adopted in such companies, and in the case of companies limited by shares will be held to apply, unless expressly modified or excluded by the articles. The memorandum and articles of association are sent to the registrar, who issues a certificate of incorporation, and the subscribers and persons joining them thereupon become a corporate body with perpetual succession, and a common seal, and power to hold lands, but with liability on the part of members to contribute to the assets of the company in the manner prescribed by the Act. Companies, not intended for the pursuit of gain, may not hold more than 2 acres of land without a licence from the Board of Trade. Part II. deals with the distribution of capital and liabilities of members of companies and associations under this Act. When a company is w ound up, every present and past member shall be liable to contribute to the assets of the company, with the following (among other) qualifications :—No past member shall be liable, if he has ceased to be a member for a year before the w inding-up, nor shall he be liable for any debt contracted by the company after he has ceased to be a member, nor unless present members are unable to satisfy the contributions required. Part III. contains provisions for the protection of creditors and oí members. Part IV, treats of the winding-up of companies, which may be either by the court or voluntary. A company may be w ound up by the court (i.e., the Court of Chancery m England and Ireland, and Court of Session in Scotland) in the following cases, viz., when a special resolution of the company has been passed requiring it; when the company does not begin business within a year from its incorporation, or suspends business for a year; when the members are reduced to less than seven; when it is unable to pay its debts; and when the court thinks it ought to be wound up. Where a voluntary winding-up has been begun, the court may order it to be continued, subject to the supervision of the court. Part V, constitutes a registration office. Part VI. applies the Act to companies registered under the various Joint-Stock Companies Acts. Part VII. defines the companies “authorized to register under this Act.” Part VIII. applies the Act to unregistered companies. Part IX. contains a repealing clause and some temporary provisions. After five years’ experience of the original Act an amending Act was published in 1867, and the two are to be construed together. The Companies Act 1867 contains provisions facilitating changes in the constitution of companies. A limited company may have directors with unlimited liability. A company limited by shares may under certain conditions reduce its capital, or divide its capital or part thereof into shares of smaller amount than is fixed by the memorandum of association. Associations not intended for gain may have the privileges of limited liability without being compelled to use the word “limited” after their names. A company may have some shares fully paid and others not. A limited company may issue warrants for shares fully paid up, in name of bearer. There are several sections dealing with contracts made on behalf of a company, and one important section, the 38th, enacts that any prospectus not specifying such contracts shall be deemed fraudulent on the part of the promoters, Ac., issuing the same, as regards any person taking shares in the company on the faith of such prospectus. This section was drawm to meet the practice of concealing from investors contracts which w ould be binding on the intended company when formed, and its somewhat ambiguous phraseology has been the subject of much discussion in the law courts See, for example, in re Coal Economizing Gas Company-Lover’s Case, Law Reports 1, Chancery Division 182.

The objects of certain trading companies, as, for example, railways, involve an interierence with the rights of private persons, which requires the direct authority of the Legislature. Such undertakings are therefore authorized by special Acts of Parliament, which begin as private bills before one or other of the two Houses, and pass through both, and receive the assent of the sovereign in the same manner as public bills (see Bill). The principles on which state interference with private rights is thus granted have so far been ascertained and fixed by the practice of many parliaments, that the procedure in private bills has tended to assimilate itself more and more to an ordinary litigation. The committees are tribunals acknowledging certain rules of policy, and hearing evidence from witnesses and arguments from professional advocates. An important point in the history of this kind of legislation is marked by the three Consolidation Acts of 1845 (8 and 9 Vict.) The Companies Clauses Consolidation Act consolidates sundry provisions relating to the constitution and management of joint-stock companies, usually introduced into Acts of Parliament authorizing the execution of undertakings of a public nature by such companies. The Lands Clauses Consolidation Act applies to undertakings authorized by special Act to take or purchase land. The Railways Clauses Consolidation Act applies to Acts authorizing the construction of railways. The clauses of the Consolidation Acts are to be taken as incorporated in a special Act of the class in question, unless they are expressly varied or excepted thereby. A further development of the same tendency may be observed in proposals which have been made from time to time to hand over the authority of Parliament, in relation to such companies, to a permanent tribunal.

Livery Companies.— These societies, now chiefly remarkable as a feature in the municipal organization of London, belong to a class of institutions which at one time were universally prevalent in Europe. In most other countries they have disappeared; in England, while their functions have wholly changed, the organization remains. The origin of the city companies is to be found in the craftgilds of the Middle Ages. The absence of a strong central authority, such as we are now accustomed to, doubtless accounts for thetendency to confederation in thebeginning of modern societies. Artificial groups, formed in imitation of the family, discharged the duties which the family was no IongoΓ able, and which the state was not yet able, to undertake. The inhabitants of towns were forced by external pressure into the societies known as gild-merchants, which in course of time monopolized the municipal government, became exclusive, and so caused the growth of similar societies among their excluded citizens. The craftgilds were such societies, composed of handicraftsmen, which entered upon a severe struggle for power with the earlier gilds and finally defeated them. The circumstances and results of the struggle are stated to have been of much the same character in England and on the Continent. In London the victory of the crafts is decisively marked by the ordinance of the time of Edward II., which required every citizen to be a member of some trade or mystery, and by another ordinance in the 49th of Edw. III., which transferred the right of election of corporate officers (including members of Parliament) from the ward-representatives to the trading companies. Henceforward, and for many years, the companies engrossed political and municipal power in the city of London.

The trading fraternities assumed generally the character of corporations in the reign of Edward III. Many of them had been chartered before, but their privileges, hitherto exercised only on sufferance and by payment of their terms, were now confirmed by letters patent. Edward III. himself became a member of the fraternity of Linen Armourers, or Merchant Taylors, and other distinguished persons followed his example. From this time forward they are called livery companies, “from now generally assuming a distinctive dress or. livery.” The origin of the Grocers’ Company is thus described :—“Twenty-two persons, carrying on the business of pepperers in Soper’s Lane, Cheapside, agree to meet together, to a dinner, at the Abbot of Bury’s, St Mary Axe, and commit the particulars of their formation into a trading society to writing. They elect after dinner two persons of the company so assembled

Rogçr Osekyn and Lawrence de Hallwell—as their first governors or wardens, appointing, at the ^ame time, in conformity with the pious custom of the age, a priest or chaplain to celebrate divine offices for their souls” (Heath’s “Account of the Grocers’ Company,” quoted in Herbert’s Twelve Great Livery Companies, vol. i. p. 43). The religious observances and the common feasts were characteristic features of those institutions. They were therefore not merely trade unions in the current meaning of that phrase, but may rather be described as forms of industrial self-government, the basis of union being the membership of a common trade, and the authority of the society extending to the general welfare, spiritual and temporal, of its members. It must be remembered that they flourished at a time when the separate interests of master and servant had not yet been created; and indeed, when that fundamental division of interests arose, the companies gradually lost their functions in the regulation of industry. The fact that the craftsmen were a homogeneous order will account for the wide authority claimed by their societies, and the important public powerr which were conceded to them. Their regulations, says Herbert, “chiefly regarded the qualifications of members, keeping of their trade secrets, the regulations of apprenticeship and of the company’s peculiar concerns, the domestic management of the fraternity and its funds, and the uniting together of it in brotherly love and affection. To these may be added, as forming a prominent feature in all the ancient communities, the regulation of their religious and other ceremonies.” In the regulation of trade they possessed extensive powers. They required every one carrying on the trade to join the company. In the 37th of Edward III., in answer to a remonstrance against the mischief caused by “the merchants called grocers who engrossed all manner of merchandize vendable, and who suddenly raised the prices of such merchandize within the realm,” it was enacted “that all artificers and people of mysteries shall each choose his own mystery before next Candlemas, and that, having so chosen it, he shall henceforth use no other.” Dr Brentano (On Gilds) holds that it is wrong to represent such regulations as monopolistic, inasmuch as there was no question whatever of a monopoly in that time nor until the degeneration of the craftgilds into limited corporations of capitalists. In the regulation of trade the right of search was an important instrument. The wardens of the grocers are to “assay en weights, powders, confeccions, platers, oyntments, and all other things belonging to the same crafte.” The goldsmiths had the assay of metals, the fishmongers the oversight of fish, the vintners of the tasting of wine, <fcc. The companies enforced their regulations on their members by force. Many of their ordinances looked to the domestic affairs and private conduct of the members. The grocers ordain “that no man of the fraternité take his neyghbor’s house y t is of the same fraternité, or enhaunce the rent against the will of the foresaid neyghbor.” Perjury is to be punished by the wardens and society with such correction as that...