A company was once someone you shared bread with
The word company traces back to a Late Latin term for the person who eats bread beside you. Centuries later, English judges declared the corporation an invisible, soulless and immortal person that could neither swear an oath nor be excommunicated. That odd legal fiction now organises most of the world's work.
Linguistically, the trail runs through Old French compagnie, recorded in 1150 with senses ranging from friendship to a troop of soldiers, back to companio in the Salic law of around AD 500, itself a loan translation of a Germanic phrase meaning with bread. By 1303 English used company for trade guilds, the business sense appears in the 1550s, and the handy abbreviation co. dates from 1769.
Legally, a company is an artificial person created under law, with its own capacity, perpetual succession and a common seal, largely untouched when an individual member dies or goes bankrupt. In 1612, in the Case of Sutton's Hospital, Sir Edward Coke described such a body as existing only in the contemplation of the law, lacking a soul and able to appear only through an attorney. Not everyone was impressed: in 1776 Adam Smith doubted that managers of other people's money would take the care owners take with their own.
Modern corporate law was built in bursts. William Gladstone chaired a parliamentary committee in 1843 that produced the Joint Stock Companies Act 1844. In the United States, worry about concentrated wealth brought the Sherman Antitrust Act of 1890 and the Clayton Act of 1914, which let government block harmful mergers. The 1929 crash set off a spiral of closures and lay-offs into the Great Depression, and the New Deal answered with securities laws in 1933 and 1934 and a commission requiring companies to disclose material information to investors.
After the Second World War, directors were broadly seen as free to weigh all stakeholders, perhaps raising wages rather than dividends. States competed for corporate charters, and by the 1960s Delaware hosted most of the largest American firms. The 1980s merger boom brought poison pills and a surge in pension money handled by asset managers, while executive pay pulled away from ordinary wages. Enron in 2001 and the 2008 crisis produced the Sarbanes-Oxley and Dodd-Frank reforms, yet the basic framework has barely shifted since the 1980s.
Source: Company
