History

In the wake of the French Revolution

French Revolution

The French Revolution , sometimes distinguished as the 'Great French Revolution' , was a period of radical social and political upheaval in France and Europe. The absolute monarchy that had ruled France for centuries collapsed in three years...

 in 1791, the right to free registration for all private companies was proclaimed. There was a boom in registrations, but this was followed by a bust in 1793. The law was reversed until 1796 when the principle of free incorporation was established again.

The law was consolidated in Napoleon's Code de commerce of 1807 using a concession system. While previously public companies with special privileges were created by a special act of the state, the Code allowed the companies to be formed according to general company law rules. Specific state permission was still required. Article 33 recognised limited liability

Limited liability

Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...

 for members. The Code de commerce was applicable outside France in Baden

Baden

Baden is a historical state on the east bank of the Rhine in the southwest of Germany, now the western part of the Baden-Württemberg of Germany....

 and the Prussian Rhine province, and it came to serve as a model for all later European public company statutes. The first German public company statute was the Prussian Act of 1843, five years after the Prussian Act on railway enterprises of 1838. Under the Loi sur les Sociétés of 1867 France adopted a system for free registration of companies.

See also

• UK company law
• European company law
  European company law
  European company law is an emerging field of legal scholarship, which concerns the formation, operation and insolvency of corporations within the European Union. There is presently no substantive European company law as such, although a host of minimum standards are applicable to companies...
  
  
• German company law
  German company law
  German company law is an influential legal regime for companies in Germany. The primary form of company is the public company or Aktiengesellschaft . The private company with limited liability is known as a Gesellschaft mit beschränkte Haftung...
  
  
• US corporate law