rose for the purpose of moving for a Committee of the whole House to consider the state of the Law of Partnership, with a view to providing for the following purposes, viz.:—For the Registra- 1755 tion of Joint Stock Companies, and for conferring on such Companies certain privileges of Corporate Bodies, subject to the payment of certain fees, and on certain conditions and regulations, and for preventing the establishment of fraudulent Companies; for the regulation of Joint-Stock Companies; for facilitating and improving the remedies at Law and in Equity in reference to Joint-Stock Companies, their members, directors, and other officers, whether inter se or in relation to persons not being members thereof, and for winding up the affairs of Companies unable to meet their pecuniary engagements; and for enabling private Partnerships to register the names of their partners, and to sue and be sued in the name of their firm. The propositions he had to make, or the greater part of them, were founded on a Report of the Select Committee of that House which sat during several Sessions of Parliament for the purpose of investigating the position of Joint-Stock Companies. The inquiry had not been extended to that important class of subjects connected with banking; but with that limitation the whole of the rest of the subject had been investigated. There were two classes of evils connected with Joint-Stock Companies that required a remedy. The first was the formation of fraudulent companies, into which innocent and inexperienced persons were induced to enter on account of the respectability of the names connected with them, to their own great, and, in many instances, ruinous loss. The other class was that of the formation of companies which, although not dishonest, were badly constructed and unwisely conceived. It was proposed to meet these evils by applying a remedy in various forms. It was not intended by this measure to give an indiscriminate encouragement to Joint-Stock Companies, nor, on the other hand, to impose burthens and restraints upon them other than such as were necessary or were manifestly to the public benefit. And as to those burthens or restraints, they would be attended in many instances with benefit in respect of existing evils. He should first propose to apply to Joint-Stock Companies that which was the most wholesome remedy for a public evil, when it was necessary that there should be a remedy for the public—that of giving a power of public opinion, and creating that responsibility which attached to all acts done in a public cha- 1756 racter. For that purpose he should move in the Committee for leave to bring in a Bill for the Registration of Joint-Stock Companies; but in registering those Companies it would be necessary to recognize them for certain purpose as corporate bodies. That was an important change in the law. At the same time, it did not change the course of the law, but rather accelerated it; because, in the present state of the law, Joint-Stock Companies had, under the pressure of absolute necessity, extorted, piecemeal, from the courts of law, a recognition of their distinct existence; and, without any strictly statutory title, they had become, to all intents and purposes, recognized creatures in the eye of the law. He should propose that the Companies on being registered and subjecting themselves to inspection, both with regard to the persons who conducted them, and likewise the mode in which the affairs themselves were conducted, should acquire in all cases the privilege of suing and being sued, and therefore of doing certain legal acts, for the purposes for which they are associated, with as much facility as they could be done by individuals. At the present moment Joint-Stock Companies had not ability to appoint any memner of their body in whose name they could sue and be sued. It was undoubtedly conferring a great boon on them to enable them to do so; but it was giving to the public a much greater boon, because he believed it would be admitted that the present inability of Joint-Stock Companies to sue and to be sued was an inability of which they contrived to avoid the effects for purposes beneficial to avoid the effects for purposes beneficial to themselves. There were modes in which, by the intervention of trustees, they might attain many of the purposes which they could more directly attain if they were legally entitled to sue; but, when we came to regard them as bodies which required to be sued, their present inability was a complete bar to the public, and, therefore, in giving Joint-Stock Companies the power, both to sue and to be sued, we were giving the public a complete means of calling them to account when guilty of malversation. What was given to them was to be justified on the ground of its being a boon to particular bodies, but a much more important boon to the public. Independently of the system of registration, he proposed to provide, by another Bill, for the regulation of Joint- 1757 Stock Companies, by which was meant a certain amount of provision, which, of course, it would be in the discretion of the House to restrict or extend, for the purpose of determining the constitution of Joint-Stock Companies. It was at present usual, in Acts of Incorporation obtained from Parliament to provide for the constitution of Joint-Stock Companies; and now that they were going to make all Joint-Stock Companies, in some sense, recognised by Statute, it seemed obviously to follow, that they should take those securities from Joint-Stock Companies at large which heretofore it had been usual to take in those particular isolated cases which were the subject of statutory enactment. He proposed also to meet another great evil of the present state of these Associations, viz., the extreme deficiency of legal remedies, both as applicable to remedies of shareholders against the managers and directors, and likewise as applicable to the remedies of the public against these Companies. This, perhaps, of all parts of the subject, was one on which it was least convenient for him to enter in the present early stage of the business, but the resolution of the Committee on Joint-Stock Companies, which was recently laid on the Table, would explain the measures he proposed to take to facilitate and improve these remedies at Law and Equity; and he trusted that the Bill, which he should shortly lay on the Table, would completely explain this to the House. Lastly, it would be his duty to ask the House to bring in a Bill to introduce modifications into a particular part of the Law of Partnership, as related to private partners. It was well known that private partnerships laboured to a considerable extent, although not to the same extent, under those inconveniences which attached to Joint-Stock Companies—viz., that although there was really no ground for exercising over them the restraints which the Legislature ought to exercise over large associations of persons associated together on the principle of Joint-Stock Companies, yet private partnerships were not in the condition of being able to appoint any person to use the common name under which they acted for the legal purpose of suing those against whom they might have claims. It was obvious, that if the House were to confer on Joint-Stock Companies the power of suing and being sued, and were to withhold that 1758 power from private partnerships, there would be very great danger of their acting in contravention of a principle which had received almost universal sanction in the regulation of commercial concerns in this country; which principle he took to be that where you could attain a commercial purpose by means of private partnership you should attain it by those means, and you should only resort to those larger associations in which the principle of responsibility and individual vigilance of control was weaker, in cases which were exceptional, and where from the amount of capital required, or the extent of the risk, you could not work out your purpose by other means. On that ground he proposed, lastly, to bring in a Bill to enable private partnerships, associated for mercantile purposes, to sue and to be sued. He would not at this moment go into the details of these measures, but would move that the House resolve itself into a Committee of the whole House, to consider the state of the Law of Partnership.
§ House in Committee, when the following Resolutions were adopted:—
- 1. That the Chairman be directed to move the House, that leave be given to bring in a Bill for the Registration of Joint-Stock Companies, and for conferring on such Companies certain privileges of Corporate Bodies, subject to the payment of certain fees, and on certain conditions and regulations, and for preventing the establishment of Fraudulent Companies.
- 2. That the Chairman be directed to move the House, that leave be given to bring in a Bill for the regulation of Joint-Stock Companies.
- 3. That the Chairman be directed to move the House, that leave be given to bring in a Bill for facilitating and improving the remedies at Law and in Equity, in reference to Joint-Stock Companies, their Members, Directors, and other Officers, whether inter se or in relation to persons not being members thereof, and for winding up the affairs of Companies unable to meet their pecuniary engagements.
- 4. That the Chairman be directed to move the House, that leave he given to bring in a Bill for enabling private partnerships to register the names of their Partners, and to sue and be sued in their name of their firm.
§ House resumed.
§ Resolutions reported and Bills accordingly ordered to be brought in.