COMPANY is one of the many words used to denote the association of individuals in the pursuit of some common purpose. Partnership, union, society, club, corporation, and company, all have this shade of meaning in common, although they differ from each other in many particulars. The suggested derivation of the word company (from cum panis) may be compared with the original meaning of gild. A gild was a feast, and the first associations named gilds, like the first associations named companies, had for their object the furtherance of a common entertainment. Corporation, unlike the other words of similar meaning, has in law a very definite signification. It applies only to an association which has been endowed with a fictitious personality, enabling it to sue and be sued, to acquire rights and incur obligations, without the individual members thereof being implicated. Company, on the other hand, may be used generally to describe almost any kind of association. In practice, however, it is confined to two classes of associa-tions. The first are those joint-stock companies whose vast proportions and wide ramifications are among the most striking features of modern industrial life. The other are the livery or city companies, which still retain the name and the constitution, while they have long abandoned the objects of the gilds of the Middle Ages See CORPORATIONS.
Joint Stock Companies.Commercial companies are a comparatively modern creation in English law. The com-mon law appears to have recognized no privileged associa-tions 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 part-nerships 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 his. 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 transfer-able 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 com-panies, 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 Partner-ship). 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 incorpora-tion 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 Yict. 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, with-out 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 are at 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 gave 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 associa-tions 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 memor-andum 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 wound up, every present and past member shall be liable to contribute to the assets of the company, with the following (among other) qualifica-tions :No past member shall be liable, if he has ceased to be a member for a year before the winding-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 of members. Part IV. treats of the winding-up of companies, which may be either by the court or voluntary. A company may be wound up by the court (i.e., the Court of Chancery in 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, &c. issuing the same, as regards any person taking shares in the company on the faith of such prospectus. This section was drawn to meet the practice of concealing from investors contracts which would 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 interterence 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 manage-ment 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 longer 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 handicrafts-men, which entered upon a severe struggle for power with the earlier gilds and finally defeated them. The circum-stances and results of the struggle are stated to have been of much the same character in England and on the Con-tinent. 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 Roger Osekyn and Lawrence de Hallwellas their first governors or wardens, appointing, at the same 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 powers which were conceded to them. Their regulations, says Herbert, '"'chiefly regarded the qualifications of members, keeping of their trade secrets, the regulations of apprentice-ship 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 affeetion. 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 hence-forth use no other." Dr Brentano (On Gilds) holds that it is wrong to represent such regulations as monopolistic,inas-much 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 belong-ing to the same crafte." The goldsmiths had the assay of metals, the fishmongers the oversight of fish, the vint-ners of the tasting of wine, &c. 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 fraternite take his neyghbor's house y* is of the same fraternite, or enliaunce the rent against the will of the foresaid neyghbor." Perjury is to be punished by the wardens and society with such correction as that other men of the fellowship may be warned thereby. Members reduced to poverty by adventures on the sea, increased price of goods, borrowing and pledging, or any other misfortune, are to be assisted " out of the common money, according to his situation, if he could not do without."
Following what appears to be the natural law of their being, the companies gradually lost their industrial character. The course of decay would seem to have been the following. The capitalists gradually assumed the lead in the various societies, and the richer members engrossed the power, and the companies tended to become hereditary and exclusive. Persons might be members who had nothing to do with the craft, and the rise of great capitalists and the development of competition in trade made the regulation of industry by means of companies no longer possible. For an account of the " degeneration of craftgilds " a general reference may be made to Brentano On Gilds, c. iv. The usurpation of power on the part of the richer members was not always effected without opposition. Brentano refers to a pamphlet on the Clothworkers' Company, published in 1649, which asserts that " the commonalty" in the old charters meant, not the whole gild, but only the masters, wardens, and assistants. Herbert records a most interesting dispute in the Goldsmiths' Company in 1529. The mode of electing officers, and the system of management generally, was challenged by three members who called themselves " artificers, poor men of the craft of goldsmiths." The company, or rather the wardens, the assistants, and livery, presented a petition to the lord mayor, which was answered by the discontented craftsmen. The dispute was carried into the Court of Chancery and the Star Chamber. The artificers accused the company of subverting their grants, misappropriating the funds, and changing the con-stitution of the society, and they complain of this being done by the usurpation of persons who " were but merchant goldsmiths, and had but little knowledge in the science. " In 1531 the three complainants were summarily expelled from the company, and then the dispute seems to have ended. In the last stage of the companies the members have ceased to have any connection with the trades, and in most cases their regulative functions have disappeared. The one characteristic which has clung to them throughout is that of owners of property and managers of charitable trusts. The connection between the companies and the municipality is shortly as follows. The ordinance of Edward II. required freemen of the city to be members of one or other of the companies. By the ordinance of 49 Edw. III. the trading companies were to nominate the members of common council, and the persons so nominated alone were to attend both at common councils and at elec-tions. An ordinance in 7 Bichard II. restored the elections of common counctlmen to the wards, but corporate officers and representatives in Parliament were elected by a conven-tion summoned by the lord mayor from the nominees of the companies, An Act of Common Council in 7 Edw. IV. appointed the election of mayor, sheriffs, &c, to be in the common council, together with the masters and wardens of the companies. By 15 Edw. IV. masters and wardens were ordered to associate with themselves the honest men of their mysteries, and come in their best liveries to the elections; that is to say, the franchise was restricted to the "liverymen" of the companies. At this time the corpora-tion exercised supreme control over the companies, and the companies were still genuine associations of the traders and householders of the city. The delegation of the franchise to the liverymen was thus, in point of fact, the selection of a superior class of householders to represent the rest. When the corporation lost its control over the companies, and the members of the companies ceased to be traders and householders, the liverymen were no longer a representative class, and some change in the system became necessary. The Act 11 Geo. II. c. 18, and the Beform Acts of 1832 and 1867, reformed the representation in several particulars. The liverymen of the companies, being freemen of the city, have still, however, the exclusive power of electing the lord mayor, sheriffs, chamberlain, and other corporate officers.
The contributions made by the companies to the public purposes of the state and the city are interesting points in their early history. Their wealth and their representative character made them a most appropriate instrument for the enforcement of irregular taxation. The loan of £21,263, 6s. 8d. to Henry VIII. for his wars in Scotland, in 1544, is
Armourers and Braziers.
Coach and Coach-harness Makers.
Needlemakers. Painter Stainers. Parish Clerks. Pattern Makers. Pewterers. Plasterers. Plumbers. Poulterers. Saddlers. Salters. Scriveners. Shipwrights. Silkthrowsters. Skinners. Spectacle Makers. Stationers. Tallow Chandlers. Tilers and Bricklayers. Tinplate "Workers. Turners. Upholsterers. Vintners. Watermen. Wax Chandlers. Weavers. Wheelwrights. Woolmen.
believed by Herbert to be the first instance of a pecuniary grant to the Crown, but the practice rapidly gained ground. The confiscation of ecclesiastical property at the time of the Beformation affected many of the trusts of the com-panies ; and they were compelled to make returns of their property devoted to religious uses, and to pay over the rents to the Crown. In course of time the taxation of the com-panies became "a regular source of supply to Government." The historians of the city have for the most part described these as unjust and tyrannical exactions, but, looking at the representative and municipal character of the companies and the purposes to which their contri-butions were applied, we may regard them as a rough but not unfair mode of taxation. The Government, when money was wanted for public works, informed the lord mayor, who apportioned the sums required among the various societies, and issued precepts for its payment. Contributions towards setting the poor to work, erecting the Royal Exchange, cleansing the city ditch, discovering new countries, furnishing military and naval armaments, for men, arms, and ammuniton for the defence of the city, are among what Herbert calls the sponging expedients of the Government. The Crown occasionally interfered in a more unjustifiable manner with the companies in the exercise of their patronage. The Stuarts made strenuous efforts to get the control of the companies. Terrified by the proceedings in the quo warranto case, most of the com-panies surrendered their charters to the Crown, but such surrenders were annulled by the Act of 2 William and Mary reversing the judgment in quo warranto against the city. The livery companies now in existence are the following :
Felt Makers. Fishmongers. Fletchers. Founders.
Gold and Silver Wire-
drawers. Goldsmiths. Grocers. Gunmakers. Haberdashers. Homers. Innholders. Ironmongers. Joiners. Leathersellers. Loriners.
Makers of Playing
Cards. Masons. Mercers.
Merchant Taylors. Musicians.
The following are the twelve great companies :Mercers, Grocers, Drapers, Fishmongers, Goldsmiths, Skinners, Merchant Taylors, Haberdashers, Salters, Ironmongers, Vintners, CJoth-workers. The "Irish Society" was incorporated in the 11 James I. as "the governor and assistants of the new plantation in Ulster, within the realm ot Ireland." The twelve companies contributed in equal portions the sum of £60,000 for the new scheme, by which it was intended to settle a Protestant colony in the lands forfeited by the Irish rebels. The companies divided the settlement into twelve nearly equal parts, assigning one to each, but the separate estates are still held to be under the paramount jurisdiction of the Irish Society. The charter of the society was revoked by the Court of Star Chamber in the reign of Charles I., but a new one was granted by Charles II., under which the society still acts.
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