Difficulties in establishing a limited liability company in Great Britain in the 1860s and the role of financial information: a case history

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Barnes, P. and Firman, R., 2001. Difficulties in establishing a limited liability company in Great Britain in the 1860s and the role of financial information: a case history. Financial History Review, 8 (2), pp. 143-161. ISSN 0968-5650

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Official URL: https://doi.org/10.1017/S0968565001000233

Abstract

As a result of legislation in 1855, 1856 and 1862 that effectively enabled limited liability companies to be formed with minimum difficulty for the first time, there was an explosion of new companies. However, after the collapse of Overend, Gurney Ltd in 1866 they became unpopular. This paper examines the case of a business which failed to raise the necessary funding because of suspicion of exaggerated claims made in public prospectuses and the ways in which it attempted to survive. This gypsum industry case history also illustrates the problems facing the new class of ‘pure’ investors and directors who had little understanding of the industry in which their company was operating and the nature and reliability of the financial information available to them required for their decision-making.

Item Type:

Journal article

Publication Title:

Financial History Review

Creators:

Barnes, P. and Firman, R.

Publisher:

Cambridge University Press

Place of Publication:

Cambridge

Date:

2001