The UK Bubble Act 1720's prohibition on establishing companies remained in force until its
repeal in 1825. By this point theIndustrial Revolution had gathered pace, pressing for legal
change to facilitate business activity. The Bubble Companies, etc. Act 1825 was the beginning of
gradual lifting on restrictions, though business ventures such as those chronicled by Charles
Dickens in Martin Chuzzlewit under primitive companies legislation were often scams. Without
cohesive regulation, proverbial operations like the "Anglo-Bengalee Disinterested Loan and Life
Assurance Company" would be undercapitalised ventures promising no hope of success except
for richly paid promoters. Then in 1843, William Gladstone took chairmanship of a
Parliamentary Committee on Joint Stock Companies, which led to the Joint Stock Companies
Act 1844. For the first time it was possible for ordinary people through a simple registration
procedure to incorporate. The advantage of establishing a company as a separate legal
person was mainly administrative, as a unified entity under which the rights and duties of all
investors and managers could be channeled.
The most important development, was the Limited Liability Act 1855, which allowed investors
to limit their liability in the event of business failure to the amount they invested in the company.
These two features - a simple registration procedure and limited liability - were subsequently
codified in the first modern company law Act, the Joint Stock Companies Act 1856. This was
subsequently consolidated with a number of other statutes in the Companies Act 1862, which
remained in force for the late century, up to and including the time of the decision in Salomon v
A Salomon & Co Ltd.
Most corporate charters were, and still are, regulated by the states. Prior to the late 19th century,
most companies were incorporated by a special bill adopted by legislature. By the end of the
18th century, there were about 300 incorporated companies in the United States, most of them
providing public services, and only eight manufacturing companies In the early 19th century,
states began to enact corporation laws. New York was the first state to enact a corporate statute
in 1811. The 1811 New York corporate law allowed for the formation of limited liability
corporations with a simple registration system; however, this was only available for
manufacturing companies. New Jersey followed New York's lead in 1816, when it enacted its
first corporate law In 1837, Connecticut adopted a general corporation statute that allowed for
the incorporation of any corporation engaged in any lawful business. Delaware did not enact its
first corporation law until 1883.
These early state corporation laws were all restrictive in design, often with the intention of
preventing corporations for gaining too much wealth and power Investors generally had to be
given an equal say in corporate governance, and corporations were required to comply with the
purposes expressed in their charters. Therefore, some large-scale businesses used other forms of
association; for example, Andrew Carnegie formed his steel operation as a limited
partnership and John D. Rockefeller set upStandard Oil as a corporate trust.
Until the late 19th century, the f