ABSTRACT
This chapter gives an historical account of the emergence of modern company law in England1 and America. In both countries early companies, or corporations as they are called in America, were created by charters and were known as charter companies. Charters were granted by the sovereign power. In England, charters were granted by the Crown, in America they were granted by state legislatures. In both countries they bequeathed and were designed to bequeath privilege. This could be in the form of limited liability for the members or monopoly trading rights, but in both countries this was justified because these corporations formed some quasi-public function such as providing revenue for the state or building public utilities. Later, in the nineteenth century when companies could be formed under general incorporation laws the charter company form in America largely fell into disuse. In England they had already fallen into disuse following the scandalous collapse of the South Sea Company. As companies were incorporated under general incorporation Acts they gradually lost their public character and the privileges and powers inherent in the company form became less apparent.
