Roman law recognised certain types of body as having corporate status and these ideas influenced Canon Law. Roman and Canon Law ideas influenced the development of the Common Law ideas of corporations. The question of limited liability of members of corporations came later although it was often assumed. Early forms of corporation were eleemosynary, existing to pursue charitable objects of their founder. Some of these were incorporated by Papal Bull or Royal Charter. In the case of ancient corporations there was a presumption of a lost grant. The corporations existed for the public benefit.2 There was also a notion of public benefit in the incorporation of early trading corporations such as the Muscovy Company, the East India Company, and the Africa Company. Such bodies existed for mixed public and private purposes. This tendency was followed in the early history of the United States of America. Corporations were social organisations ‘midway between the state and the individual, owing their existence to the latter’s need of organisation and the former’s inability to supply it.’ John P Davis in his massive work, Corporations: A Study of the Origin and Development of Great Business Combinations and of Their Relation to the Authority of the State in 1905 wrote that corporations have changed from divisions of society to associations of individuals. The early theory of incorporation was predicated on the idea of privilege to be granted on certain terms. With the modern company registration system from the UK Companies Act 1844 and its Australian counterparts, there is the development of an alternative theory based on the corporation as a contract. This was reflected in increasing latitude with regard to corporate constitutions. The concept of the corporation as a separate legal person was not clearly recognised until 1897 with the House of Lords decision in Salomon v Salomon &Co Ltd. The early companies legislation merely referred to the subscribers forming themselves into an incorporated company and did not spell out the consequences in any detail. As a learned commentator in the Law Quarterly Review of 1897 stated: ‘Our Legislature … delivered itself on the Companies Acts in its usual oracular style, leaving to the Courts the interpretation of its mystical utterances’. J H. Farrar
Posted on: Thu, 28 Aug 2014 10:41:59 +0000
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