Company limited by shares

The formation of companies limited by shares is closely related to the use of financial capital:

• Factory and production equipment
• Transportation
• Inventory
• Insurance of risks

The structure for production of goods have evolved:

• Craftsman
• Family
• Guilds
• Cooperatives
• Companies and factories

There have been different methods of creating, known as incorporating, companies limited by shares:

1. Original method in England was by Royal charter.
2. Royal charter was expanded with private act of Parliament.
3. The Joint Stock Companies Act 1844 by Parliament further expanded access with a standard process.
4. The Limited Liability Act 1855 defined the concept of limited liability.
5. The Joint Stock Companies Act 1856 improved the registration process.
6. In the UK today, companies must be registered with Companies House and comply with the Companies Act 2006.

A company limited by shares is a separate legal entity:

• Separate from shareholders
• Perpetual from changes of shareholders

The concept of limited liability was one of the attractions of using companies limited by shares:

• Members not responsible for debt of the company.
• Members are exempt from bankruptcy proceedings.
• Members are not subject to additional calls for capital by managers.

The concept of company stock has evolved with time and industry:

• Joint-stock capital
• Transferable subscriptions
• Corporate shares
• Equity assets

Company stock is one of many early forms of traded financial instruments:

• Government bonds
• Insurance
• Commodities
• Foreign currencies
• Company stock

There have been different markets for trading company stock:

• Personal associations
• Pubs and coffeehouses
• Exchange Alley
• The Stock Exchange

Aspects of factories and companies that have been contested for control:

• Schedules
• Rate of work
• Pricing of products
• Marketing of products
• Share of profits

Management of companies have developed gradually and continues to evolve:

1. Owner/entrepreneur
2. Internal contracting
3. Craft control
4. Separation of labor and managers (Taylorism)
5. Flexible semi-skilled labor (Fordism and the assembly line)
6. Supply chain management