On the laws relating to joint-stock companies

Abstract

The limited liability act of 1856 has placed the law of joint-stock companies in a satisfactory state, so far as regards the position of the shareholders. They can obtain a charter of incorporation by simply ^plying for it, and the liability of shareholders is limited to the amount of the shares. But if the principle I have stated is sound — that mercantile liability for the consequences of a man's own actions ought to be unlimited — it follows, that in every concern the acting partners ought to be under unlimited liability. The acting partners of a joint-stock company are the directors; and yet the law does not recognise their unlimited liability. This ought to be changed.