Question

Write short note on Evolution of Business Organizations.

Answer 1

Hawtrey and Dullard provide a brief account of how the legal basis of the modern corporation developed.30 The genesis of the modern corporation can be traced back to the Romans, "who in the ninth and tenth centuries formed organizations known as societas maris (maritime firms)."31 They had a structure to this organization, a socius stans or partner on land, and a socius tractor or partner at sea. Hawtrey and Dullard recognize this structure as "an early origin of the division between capital and labor."32 Angell and Ames described how this form found subsequent favor in France and England.33 Pollock and Maitland similarly described the development of the royal charter of incorporation.3 4 These charters were the devices through which the Crown, or a country's monarch, granted considerable powers of self-governance to the church and boroughs (administrative territories) through the 15th century. By the 16th century, the instrument of royal charter was being deployed in a business context to raise capital for mercantile trade and to create infrastructure for public goods such as turnpikes, canals, and railroads. The purpose of these developments was to provide organizations a degree of independence from the Crown in terms of rights of perpetual succession, ownership, and self-governance.35 Today, the process of applying for incorporation of a company in the United States and Canada results in the issuance of a written document by the state, referred to as the corporate charter, through which the society recognizes the company as a legal entity. This document is also known as the certificate of incorporation or the articles of incorporation.