How and when was the modern company ownership structure invented?
Upvote:1
Since the other answers are the 17th c., I just want to note that Falu gruva is a bit older.
The organizational structure of Falun Mine created under the 1347 charter was advanced for its time. Free miners owned shares of the operation, proportional to their ownership of copper smelters. The structure was precursor to modern joint stock companies, and Stora Enso, the modern successor to the old mining company, is often referred to as the oldest joint stock company still operational in the world.
Not sure if this is what the OP was looking for.
Edit: the corporation:
The Swedish copper mining company Stora Kopparberg ("great copper mountain") in Falun was granted a charter from King Magnus IV of Sweden in 1347, although the oldest preserved share in the company (granting the Bishop of Västerås 12.5% ownership) dates from 1288. Some claim this to be the oldest existing corporation or limited liability company in the world.
Upvote:32
The Dutch East India Company (Verenigde Oost-Indische Compagnie) is generally seen as the first company with stocks, shareholders and board members. It didn't have 1 director, it had 17: "De Heren XVII", 'The Lords Seventeen' in English.
Why was it formed? First of all because of the huge investment and risks involved. Sending one ship from Holland all the way to (now) Indonesia was very expensive and risky. A ship returning made the owner(s) very rich, but the risk of not returning was equally high.
Second, to prevent shipowners competing against each other. It was founded by Johan van Oldenbarneveld, amongst others for that reason. (Van Oldenbarneveld was raadspensionaris or prime minister of the Dutch republic.)
Third, because at that time the Dutch were at war with Spain and needed to pull resources together. The VOC had almost national privileges, such as their own troops, the right to declare war, etc. The company was founded in 1602, with a very clear idea to cash in on the coming 12 year Truce, which was being negotiated at that moment.
One of the reasons why those negotiations took so very long was precisely that VOC. The Spanish - not surprisingly - weren't happy with it.
Upvote:42
The governance model for early corporations is the chartered city; a community granted town privileges and, if also free, independence from feudal obligations to local sovereigns or lords and debt of fealty only to the reigning monarch (ie king or emperor).
In such communities the interests of its residents were represented by a council of the leading citizens, who had the responsibility for making the bylaws of the community - civil regulations governing the operation of the town. The council would select one of their own as mayor, who had responsibility both to preside over the council meetings and to oversee the day-to-day management of the community. In the former role, the mayor was president of the council.
With the development and wide-spread adoption of double entry bookkeeping, it became possible to properly track the balance of an organization's assets against the two main classes of equities (or claims) against those assets:
- debt equities or liabilities; and
- ownership equities.
Further, double entry bookkeeping complicates the ability of a corporate officer to engage in embezzlement, increasing the confidence of passive investors that their interests are being fairly represented.
About 1600 these two developments come together with the concept of a corporation under a royal charter, creating limited liability for those who merely invest in the organization. Combined with the increased confidence in fiduciary accountability accompanying double entry bookkeeping, and the governance model of the charter cities, this attracts passive investors in sufficient quantity to allow large corporate entities to arise.
The interests of the passive investors are represented by a council of directors that becomes termed the board of directors. From amongst their own number the Board appoints officers of the corporation including one responsible for presiding over the officers - the president. Over time the spatial separation between the investors and the corporate operations makes clear that the two functions must be separated into a president of the management team, and a chairman of the board.
In the 20th century the increasing complexity of corporate structures, with subsidiary corporations and holding companies spun off for additional risk management, requires a multiplicity of presidents (for each corporation) and chairmen (for each board). The terms Chief Executive Officer and Chief Operating Officer emerge at this time to distinguish the most senior of the chairmen and presidents respectively.
The truly modern corporate structure - a plethora of holding companies (ie holding the key conglomerate assets, including subsidiaries) and subsidiary operating companies (holding the key conglomerate long term liabilities) - is a product of both modern computing (enabling the vastly increased number of transactions) and modern corporate income tax legislation (creating differential tax rates by corporate type for various asset financing arrangements). In that sense, the modern structure has only occurred in the last three decades or so, since personal computers became ubiquitous in the office environment.
More post
- 📝 Did the Portuguese get anything in return when they handed back Macau?
- 📝 When did hanging emerge as a form of capital punishment?
- 📝 How can we make claims of ancient alcohol consumption based on chemical analysis of remains?
- 📝 Did the Germans use a "Verdun"-like strategy at Stalingrad?
- 📝 Looking for a (preferably digital) collection of McCarthy speeches (transcripts)
- 📝 Medieval wall and garment patterns
- 📝 How was religious diversity represented in the Thirteen Colonies?
- 📝 Robert Hookes Diary - Why would he have bought and drunk Vomit?
- 📝 Are there any existing foreign language teaching texts from the Ancient Near East?
- 📝 What literary or philosophical works did the ancient Egyptians have that have influenced ancient civilizations or the modern word?
- 📝 Did any of the US States ever attempt to secede, aside from American Civil War times?
- 📝 Did Western governments object to repression of western communists during Stalinism?
- 📝 When did India become a major trading center?
- 📝 Relative merits of oligarchy and democracy
- 📝 Why didn't American POWs in Germany seek support from Russian infantry, in WWII?
- 📝 Did Brahms really leave Germany because he was dissatisfied with the political realities of that time?
- 📝 Was there a "European Balance of Power Strategy" for Anglo-American interests in between 1925 and 1935?
- 📝 Historical precedent for using bodyguards as special forces?
- 📝 Why did the Japanese withdraw from Siberia in 1922?
- 📝 What is Russia's official reason for invading Crimea?
- 📝 Did Britain look into taking California?
- 📝 Were there examples from Renaissance period of a relationship of erotic nature between a teacher and a student or during transmission of knowledge?
- 📝 What was the first political document that invoked the interest or betterment of humanity?
- 📝 What is the significance of "Flappers" in American history?
- 📝 Did the Soviet Union get a net border gain from China during World War II?
- 📝 Prior to 1963 did a British nobleman ever disclaim or renounce his title? What would have happened if someone had tried?
- 📝 How did Renaissance bring about a sense of redemption in the Europeans?
- 📝 Was Celtic society promiscuous?
- 📝 Are the quantities of gold that the Roman Empire looted and mined known?
- 📝 Why does this London Underground poster from 1924 have a Star of David atop a Christmas tree?
Source: stackoverflow.com
Search Posts
Related post
- 📝 How and when was the modern company ownership structure invented?
- 📝 When and how was the cairn structure in the "Sea of Galilee" covered in water?
- 📝 How was the modern geographic boundary between Europe and Asia decided?
- 📝 How was ownership of property managed during the Black Death, when so many original owners had died?
- 📝 How and when was the Temple of Trajan destroyed?
- 📝 When and how did Thailand cease to be Siam and become the modern Thailand?
- 📝 What was the basic structure of power in the CPSU and how were the politicians at each level chosen?
- 📝 How many men were lost on the USAT Arcata and was she loaded with troops when she was hit?
- 📝 When and how was West/East-German citizenship determined in the early years of post-war Germany?
- 📝 How were the Burmese able to sack Ayutthaya when it was one of the wealthiest and most powerful cities in Asia at the time?
- 📝 How and when did the word "nuclear" replace the word "atomic"?
- 📝 When and how did the USA and the UK become allies?
- 📝 How could Jews integrate into Western modern society back when Saturday was a normal working day?
- 📝 Was the Dutch State independent when the Dutch East India Company was founded?
- 📝 How likely is it that any non-Celtic language was spoken in the British Isles when the Romans invaded?
- 📝 When and why was the samurai class abolished?
- 📝 How and why was the boundary between West and East Berlin decided to be where it was?
- 📝 When and how did the Han ethnic group become by far the biggest ethnic group in China?
- 📝 How were diplomats and their staffs treated when World War II was declared?
- 📝 Were bookshops 'common' in the late 19th century, and how did they differ from modern ones?
- 📝 How common was marriage between nobles and peasants in the Middle Ages?
- 📝 How and when was Portugal created?
- 📝 How was security on the Silk Road between China and the West maintained?
- 📝 When was the change from kalends, ides and nones to numbers
- 📝 If salt was scarce and expensive, how did people "salt the earth" to ensure their enemies would stay defeated?
- 📝 When and how did the West lose its dependency on the USSR for Titanium?
- 📝 When and how did the idea of a "class-less" society originate in the United States?
- 📝 When and how did the term "Nazi" start replacing the term "Germans" in the context of WW2?
- 📝 How was the current month and day disseminated to the townspeople of Medieval Europe?
- 📝 When and where was the first time moveable bridge?