The Joint Stock Companies Act 1856 (19 & 20 Vict c 47) was an Act of the

Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...

. It was a consolidating statute, recognised as the founding piece of modern

United Kingdom company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal ...

legislation.

Overview

Unlike other

Acts of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of parliament ...

that preceded it, the 1856 Act provided a simple administrative procedure by which any group of seven people could register a limited liability company for themselves. Companies involved in banking and insurance were explicitly excluded from the provisions of the Act.

Debate

The Joint Stock Companies Bill was introduced to Parliament by the then Vice President of the

Board of Trade The Board of Trade is a British government body concerned with commerce and industry, currently within the Department for International Trade. Its full title is The Lords of the Committee of the Privy Council appointed for the consideration of ...

Robert Lowe Robert Lowe, 1st Viscount Sherbrooke, GCB, PC (4 December 1811 – 27 July 1892), British statesman, was a pivotal conservative spokesman who helped shape British politics in the latter half of the 19th century. He held office under William E ...

. In doing so he proclaimed the right of every citizen to have

freedom of contract Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...

and with it obtain limited liability for operating a business. Companies had until recently been prohibited, as a result of the

Bubble Act The Bubble Act 1720 (also Royal Exchange and London Assurance Corporation Act 1719) was an Act of the Parliament of Great Britain passed on 11 June 1720 that incorporated the Royal Exchange and London Assurance Corporation, but more significant ...

and the stock market panics of the early 18th century. There was still a lot of suspicion of companies, but Lowe rejected the idea that a limited company is inherently subject to fraud, and proposed the suffix "Ltd" to make businesses aware of limited liability. The Third Reading of the Bill took place on 2 June 1856, and passed easily.HC Deb, 2 June 1856 vol 142
cols 897–9
/ref>

Notes

References

*W Paterson (ed). "Joint Stock Companies Act". The Practical Statutes of the Session 1856. London. 1856. Page
61
to 119. *Welsby and Beavan. Chitty's Collection of Statutes. Third Edition. 1865. Volume 1. Title "Companies (Joint Stock). Page
684
to 717. *Charles Wordsworth. The Joint Stock Companies Act, 1856
Fourth Edition
Shaw and Sons. London. 1856. *Charles Wordsworth. The New Joint Stock Company Law. Shaw and Sons. London. 1859. Page
1
to 70. *Henry Thring
The Joint Stock Companies Act, 1856
London. 1856. *William George Harrison and George A Cape. The Joint Stock Companies Act, 1856. London. 1856
BibliographyCatalogue
*Edward W Cox. "The Joint Stock Companies Act, 1856". The New Law and Practice of Joint Stock Companies. Fourth Edition. London. 1857. Page
1
to 83. * * *

External links

Joint Stock Companies Act 1856 Table B
original text
Joint Stock Companies Act 1856
explanations {{UK legislation 1856 in law United Kingdom Acts of Parliament 1856 History of corporate law United Kingdom company law

Overview

Debate

See also

Notes

References

External links