A Swedish copper mine may be the oldest commercial corporation on Earth
In 1347 King Magnus Eriksson chartered the Stora Kopparberg mining community at Falun, often called the world's oldest commercial corporation. The idea behind it is older still: Roman law let burial clubs and trade guilds own property and sue as single bodies. Later came East India fortunes and Britain's first speculative bubble.
A corporation is an entity the state authorises to act as one legal person, able to hold property, sign contracts and go to court. The word comes from corpus, Latin for body. By Justinian's reign in the 6th century, Roman law recognised such bodies as collegia or universitas, and from Julius Caesar's time they needed approval from the Senate or emperor. Ancient India's Maurya Empire had comparable business groups called sreni. Medieval jurists such as Baldus de Ubaldis revived the concept and linked it to the image of the state as a body politic.
The key attraction for investors became limited liability. A passive shareholder risks only the money put in, not personal assets, for the company's debts or wrongs; shareholders elect a board to run things on their behalf. Early corporations were created one at a time by royal charter or act of parliament, whereas most places now allow simple registration. The Dutch East India Company gave investors paper share certificates, traded them on the Amsterdam exchange and wrote limited liability into its charter.
England's East India Company, chartered by Elizabeth I on 31 December 1600 with a monopoly east of the Cape of Good Hope, grew ever more entangled with military and colonial power. By 1711 its shareholders were earning a return of almost 150 percent, and its 1717 to 1722 share offering raised 1.6 million pounds. Contemporaries called it the grandest merchant society in the universe; it was also brutal and exploitative.
The South Sea Company, founded in 1711 to trade with Spanish America, showed the dark side. Spain admitted only one of its ships a year, yet promoters sold shares on lavish promises, and the company even took over the national debt. The Bubble Act of 1720 banned new unchartered companies, and people bought shares purely to flip them until the price collapsed from 1,000 pounds to under 100 by the end of that year. The ban on unchartered companies lasted until its repeal in 1825.
Source: Corporation
