corporations

A large number of economic activities are so complex or costly that they can only be undertaken by the combination of many individuals. It is not surprising, therefore, that all economic systems have been characterized by the development of large institutions such as the state or the firm. Early forms of large-scale undertakings were found in the trading companies whose business took them to the Baltic or Mediterranean. Major companies, trading ever further a field, were granted monopoly rights by the crown. The most famous was the East India Company, chartered in 1600 for a single voyage, and eventually established as a continuous operation in 1657. By 1617 the East India Company had 36 ships and 934 stockholders. These large organizations, the precursors of modern corporations, proliferated with royal charters granted to the Bank of England in 1694 and, early in the following century, to the South Sea Company, the Royal Exchange Company, and the London Assurance. The government took an opportunity in granting charters to secure promises of loans from the beneficiaries.