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

Author

Listed:
  • Grant Fleming
  • Frank Liu
  • David Merrett
  • Simon Ville

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.

Suggested Citation

  • Grant Fleming & Frank Liu & David Merrett & Simon Ville, 2022. "Share ownership and the introduction of no liability legislation in nineteenth-century Australia," CEH Discussion Papers 11, Centre for Economic History, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:hpaper:110
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    File URL: https://cbe.anu.edu.au/researchpapers/CEH/WP202211.pdf
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    References listed on IDEAS

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    Keywords

    Mining; goldmining; share ownership; Australia; company law; limited liability; no liability; investors; stock exchanges; occupations; Melbourne; investment booms.;
    All these keywords.

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