Citation 19 & 20 Vict. c.47 Royal assent 1856 Repealed — | Introduced by Robert Lowe Commencement 1856 | |
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Territorial extent England and Wales, Scotland | ||
The Joint Stock Companies Act 1856 (19 & 20 Vict. c.47) was a consolidating statute, recognised as the founding piece of modern United Kingdom company law legislation.
Contents
Overview
Unlike other 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.
Debate
The Joint Stock Companies Bill was introduced to Parliament by the then Vice President of the Board of Trade, Robert Lowe. In doing so he proclaimed the right of every citizen to have freedom of contract and with it obtain limited liability for operating a business. Companies had until recently been prohibited, as a result of the Bubble Act 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.