Incorporation laws

The legal entity called a corporation (chartered company, société anonyme, Aktiengesellschaft) can only be created by the act of a sovereign power. This is easy to forget in today's world, where a company can be incorporated via a simple application on a website. But behind every corporation stands a law, and without that legal foundation no corporation exists (that is, in practical terms, it has no legal standing).

In the nineteenth century, corporations were created individually by special acts of legislation - as a rule, one piece of legislation to establish each company. Or legislatures passed "general incorporation" laws that permitted individuals to form a corporation by meeting the requirements spelled out in the law - in other words, via an administrative process. The acts that created a corporation (or spelled out administrative procedures for incorporating) simultaneously promoted and regulated the corporation by giving it privileges not accorded to individuals and also by setting restrictions on its behavior.

Differences in the incorporation process

In the four countries in my study - France, Germany, the U.K., and the U.S. - the ease (or not) of incorporation, as well as the degree to which the law promoted or regulated corporations, varied a good deal. Both seem mainly to have depended on the politics of the incorporation process. Where in the political structure the power to create corporations was lodged - at the national vs. state/provincial level, in the hands of a legislature or a ministry - was a critical factor, perhaps the critical factor. . . . [more to come].