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A Breif History Of Business

With the development of agriculture and the concept of private property, commerce became a much more complex activity. Agriculture resulted in population growth and the formation of the first urban communities. New kinds of laws were required to sort it all out. Currency, or money, was developed as a convenient way to assign values to a wide range of goods and services, since simple barter exchanges – depending as they did on a “double coincidence of wants” – were rarely practical.

For example, suppose I was a furniture maker and you were a wheelwright. I may need a new wheel for my delivery wagon – but you may not necessarily need or want a new table and chairs. Money allowed me to exchange my furniture for something of recognized value that could be easily collected and stored, then used in another, completely different exchange.

The Origins Of Corporations

Corporations were a very early development. As trade expanded beyond localized areas – as in the case of the Phoenicians, who maintained trade connections from India to present-day Britain – the process of trade became too unwieldy and expensive for one man to deal with.

Even one ship loaded with valuable goods represented a considerable investment as well as considerable risk. Early corporations formed for the purposes of (A) raising more capital for business ventures that any one man could raise on his own, and (B) spreading the potential losses so no one individual took the brunt of a liability. Therefore, an association of Phoenician merchants could pool their investments to purchase multiple ships and cargoes, secure in the knowledge that the inevitable loss of one or two ships would not be catastrophic for the investors (lives of the captains and crews notwithstanding).

This relatively simple type of corporate structure continued to be used through Roman times. Typically, these were not permanent organizations however, but groups of investors assembled for a specific purpose.

The idea that a group of people could have an identity separate from that of its individual members was a concept introduced by the Germanic tribes that invaded Rome starting in the fourth century of the Common Era. By the Middle Ages, this concept found its way into canon law, which held that the Church organization was more than its members – and that as an organization, it was for all intents and purposes, immortal.

This, combined with theories and customs governing the relationship between the organization (in this case, the Church) and its head (the Pope) laid the foundation for the basis of modern corporate law and structures.

You now have a rough knowledge of business incorporation & history that will start off your incorporating knowledge.

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