by Alan Carvalho

Created on: May 16, 2008

The results of assembling a group of intelligent minds and conglomerating money, is strength. The idea of stock is people joining together, each part owner of a company. Taken as an idea, ownership of such an emprise would go far back in time. It was about 700 BC that Roman universities were making financial deals with Genoese merchants. This may mark the beginning of organized clusters of different people's funds. From that point onward, the character traits of the modern corporation slowly became more prevalent with the passage of time.

After the fall of Rome, Germanic tribes maintained the idea that the group was different from the individual. In the middle ages, the church was defined to be more than its members, and was accepted as perpetual regardless of the actions of any individual member.

There are certain interesting points in time that divide history into time frames. A new era began in about 1606, when the oldest surviving corporate stock certificate was issued by a Dutch company. This share records a payment for a part of the Vereinigte Oostindische company. The share, which was issued on September 27 1606, was basically the result of Dutch mariner's inclinations to cooperate with each other, and pool their resources out of economic necessity. In 1580, the two great sea-faring nations Spain and Portugal had united their China trade capabilities. The Dutch were third in the China spice trade, because of disputes among their mariners. With time, the price of spices fell, and the Dutch felt compelled to work together.

In the United States, up until about 1850, corporations were chartered by state governments for reasons that supported political interests. After 1850 the increase in new charters brought in greater revenues for the states after more permissive laws were passed that favored share holders.

By the year of 1900, definitions for the word "corporation" included the concept of individual, or acting, in some respects, as an individual. In the interest of profit, liberalization began with corporate law, and an understanding that corporations have distinct legal personalities. The ability to have transferable shares makes the corporate personality significantly stable, and somewhat impervious to and separate from the usual stock holder or company employee. This and the sheer size of some businesses, helps to weather bad economic conditions as well as ride high the favorable times.

Eventually the shift of control over to the directors of corporations, lead in part, to many hostile takeovers, and later to accounting scandals, such as the ruin of Enron.

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