This suddenly forced businesses to become
more self- sufficient as during the nineteenth century, corporations faced
difficulties in obtaining grants of corporate status from the British
parliament. It essentially pushed organizations to utilize the trust mechanism
to structure what was known as “deed of settlement” companies. The
later were complex legal entities which sometimes were used as an instrument
for fraud. So, the UK government stepped in, to remedy the situation by the
passing of the Joint Stock Companies Act. Which provided for incorporation by
simple registration. The act provided safeguards against fraud by insisting on
full publicity, and supplied a Registrar of Companies to hold public documents
provided by businesses. But a further problem remained, with the act of 1844,
whilst it gave corporate status, it still held members liable for company
debts. This resulted in the formulation of the Companies Act. By the end of the
nineteenth century, ordinary individuals could instantly create and register a
company, easily with limited liability. The Companies Act also recognized that
group structures needed to be treated differently for disclosure and financial
reporting purposes, in order to get a proper overview of the businesses financial
position. Under s3991 a
parent company had a duty to produce accounts; whilst s409 2required
parent companies to provide details of any subsidiary organisations. Remarkably,
in just a few decades, the ownership of a company transformed from just being
privileged to a few individuals. But somewhat unexpectedly became a viable form
of business for all types and size of business ventures. 

1 Companies
Act s399

2 Companies
Act s409