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Organizations, Civil Society, and the Roots of Development$
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Naomi R. Lamoreaux and John Joseph Wallis

Print publication date: 2017

Print ISBN-13: 9780226426365

Published to Chicago Scholarship Online: May 2018

DOI: 10.7208/chicago/9780226426532.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 27 June 2022

Corporation Law and the Shift toward Open Access in the Antebellum United States

Corporation Law and the Shift toward Open Access in the Antebellum United States

Chapter:
(p.147) 5 Corporation Law and the Shift toward Open Access in the Antebellum United States
Source:
Organizations, Civil Society, and the Roots of Development
Author(s):

Eric Hilt

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226426532.003.0006

This chapter analyses the general incorporation statutes for manufacturing firms adopted by the American states until 1860. Prior to the enactment of a general law, a business could only incorporate by obtaining a special act of its state legislature; general statutes facilitated incorporation through a routine administrative procedure. A new chronology of the adoption of these statutes reveals that several states enacted them much earlier than previous scholarship indicates. Analysis of these laws reveals that many imposed strict regulations on the corporations they created, whereas others granted entrepreneurs near-total freedom. Many Southern states enacted particularly liberal statutes, but sometimes also prohibited nonwhites from incorporating businesses or gave a government official discretion over access to the law. An analysis of the volume of incorporation through special charters shows that the states that failed to adopt general incorporation laws tended to offer unusually generous access to incorporation through special legislative acts. These results imply that the adoption of a general incorporation statute did not always represent a discrete transition to open access to the corporate form. Instead, general statutes sometimes included highly restrictive provisions governing access, and some states generously accommodated demands for incorporation in the absence of a general statute.

Keywords:   corporation, corporate governance, institutions, corporation law, public choice, open access, general incorporation

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