History of Companies - Renaissance and Mercantilism

Renaissance and Mercantilism

Many European nations chartered corporations to lead colonial ventures, such as the Dutch East India Company or the Hudson's Bay Company, and these corporations came to play a large part in the history of colonialism and mercantilism. Acting under a charter sanctioned by the Dutch government, the Vereenigde Oost-Indische Compagnie (VOC), or the Dutch East India Company, defeated Portuguese forces and established itself in the Moluccan Islands in order to profit from the European demand for spices. Investors in the VOC were issued paper certificates as proof of share ownership, and were able to trade their shares on the original Amsterdam stock exchange. Shareholders are also explicitly granted limited liability in the company's royal charter.

As England sought to build a mercantile Empire, the government created corporations under a Royal Charter or an Act of Parliament with the grant of a monopoly over a specified territory. The best known example, established in 1600, was the British East India Company. Queen Elizabeth I granted it the exclusive right to trade with all countries to the east of the Cape of Good Hope. Corporations at this time would essentially act on the government's behalf, bringing in revenue from its exploits abroad. Subsequently the Company became increasingly integrated with British military and colonial policy, just as most UK corporations were essentially dependent on the British navy's ability to control trade routes.

• Company of Saint George, Ufficio di San Giorgio in Genoa or Casa di San Giorgio, founded in 1407 in the Republic of Genoa
• State concession theory of companies, or the "Oktroisystem" (in German)
• Case of Sutton's Hospital (1612) 77 ER 960