Joint Stock Companies Act 1844
Overview
 
The Joint Stock Companies Act 1844 (7 & 8 Vict. c.110) was an Act
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...

 of the Parliament of the United Kingdom
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...

 that expanded access to the incorporation
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...

 of joint-stock companies.

Before the Act, incorporation was possible only by royal charter
Royal Charter
A royal charter is a formal document issued by a monarch as letters patent, granting a right or power to an individual or a body corporate. They were, and are still, used to establish significant organizations such as cities or universities. Charters should be distinguished from warrants and...

 or private act
Local and Personal Acts of Parliament in the United Kingdom
Local and Personal Acts of Parliament are laws in the United Kingdom which apply to a particular individual or group of individuals, or corporate entity. This contrasts with a Public General Act of Parliament which applies to the entire community...

 and was limited owing to Parliament's jealous protection of the privileges and advantages thereby granted. As a result, many businesses came to be operated as unincorporated associations with possibly thousands of members.
Encyclopedia
The Joint Stock Companies Act 1844 (7 & 8 Vict. c.110) was an Act
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...

 of the Parliament of the United Kingdom
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...

 that expanded access to the incorporation
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...

 of joint-stock companies.

Before the Act, incorporation was possible only by royal charter
Royal Charter
A royal charter is a formal document issued by a monarch as letters patent, granting a right or power to an individual or a body corporate. They were, and are still, used to establish significant organizations such as cities or universities. Charters should be distinguished from warrants and...

 or private act
Local and Personal Acts of Parliament in the United Kingdom
Local and Personal Acts of Parliament are laws in the United Kingdom which apply to a particular individual or group of individuals, or corporate entity. This contrasts with a Public General Act of Parliament which applies to the entire community...

 and was limited owing to Parliament's jealous protection of the privileges and advantages thereby granted. As a result, many businesses came to be operated as unincorporated associations with possibly thousands of members. Any consequent litigation had to be carried out in the joint names of all the members and was almost impossibly cumbersome. Though Parliament would sometimes grant a private act to allow an individual to represent the whole in legal proceedings, this was a narrow and necessarily costly expedient, allowed only to established companies.

The 1844 Act created the Registrar of Joint Stock Companies, empowered to register companies by a two-stage process. The first, provisional, stage cost £5 and did not confer corporate status, which arose after completing the second stage for another £5.

However, there was still no 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...

 and company members could still be held responsible for unlimited losses by the company. Limited liability was subsequently introduced by the Limited Liability Act 1855
Limited Liability Act 1855
The Limited Liability Act 1855 was an Act of the Parliament of the United Kingdom that first allowed limited liability for corporations that could be established by the general public in the UK.-Overview:...

. The system of registration was revised by the Joint Stock Companies Act 1856 which introduced the system, largely still in operation . The aim of the act was to place business and economy on a surer foundation and to increase public confidence in the honesty of business.

See also

  • Companies Act
    Companies Act
    Companies Act is a stock short title used for legislation in the United Kingdom and South Africa relating to company law....

  • Limited Liability Act 1855
    Limited Liability Act 1855
    The Limited Liability Act 1855 was an Act of the Parliament of the United Kingdom that first allowed limited liability for corporations that could be established by the general public in the UK.-Overview:...

  • Joint Stock Companies Act 1856
    Joint Stock Companies Act 1856
    The Joint Stock Companies Act 1856 was a consolidating statute, recognised as the founding piece of modern United Kingdom company law legislation.-Overview:...

  • Utopia Limited
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