Cg Issues

Summary of the case

Re-inventing the liability company

The corporate governance came into existence after the commencing of limited liability in nineteen century through which the invention of the limited liability company in the mid-nineteenth century led to the formation of vast amounts of capital, the generation of countless jobs, and the creation of incredible worldwide wealth over the years. The motive behind establishment of corporate governance was taken in order to protect the interest of the shareholders.

Besides its official introduction in nineteen century, it was already in existence during the Great European Empire in the seventeen and eighteen century. A company during those times has got many investors from rich European merchant and royal families cross the Europe. During those days India and China from Asia used to trade with the East Indian monopoly Company of England.it has been recognized that Corporate governance was very essential for any company and those companies who had poor corporate governance failed like that of The Dutch East India of the Netherland trading with Asian countries led to unrealistic expectations and subsequent corporate collapses. The father of modern economy, Adam Smith (1759, 1776) has mention that the reason behind the failure of corporate governance is because of personal interest of directors and mismanagement of public funds. During early days, society had all the controlling powers and Company promoters, directors and officers had to declare the annual reports.

In the 18th century the states declared independence, creating the United States of America in 1776, they tended to be suspicious of corporate power.In the late eighteen and early nineteen century sole-trader, joint-stock company and partnership has got more shareholder as most of the individual investors were interested in such type of business, the first ever corporate incorporation was commenced by the French government. Gradually it had spread to...