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Share ownership and the introduction of no liability legislation in nineteenth-century Australia

Grant Fleming, Frank Liu, David Merrett and Simon Ville

No 11, CEH Discussion Papers from Centre for Economic History, Research School of Economics, Australian National University

Abstract: The no liability company - where investors are not liable for uncalled parts of their shares - has been unique to Australasia. Deploying a large dataset, we provide the first empirical examination of the effects of this new corporate form on company formation and shareholding. Our focus is on Victorian goldmining, the earliest and most pervasive users of the no liability form. No liability companies largely replaced limited liability within a decade of the legislation in 1871, which was more rapid than the transition from unlimited to limited liability companies in several other nations. No liability companies attracted a broader occupational and locational range of investors beyond the mining industry and its districts, especially gentlemen and financiers. We conclude that investors believed no liability firms to be less risky because of the removal of call liabilities and the mitigation of previous regulatory failures.

Keywords: Mining; goldmining; share ownership; Australia; company law; limited liability; no liability; investors; stock exchanges; occupations; Melbourne; investment booms. (search for similar items in EconPapers)
Date: 2022-08
New Economics Papers: this item is included in nep-his and nep-law
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