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Definition

An old term for the first companies developed mostly in the UK and Europe. Companies have the advantage of limited liability which means their shareholders cannot lose more than the value of the shares which they hold and also a separation of ownership from management. Historically, these two characteristics of companies enabled them to raise much larger amounts of capital than other types of organisations- such as partnerships or guilds. There are records of companies in China dating back over 1000 years, but joint stock companies first appeared in the 13th century in France and then in the 16th century in the UK. A body of legislation for the management of companies and the disclosures that they must make to shareholders and the public has grown and is now embodied in the Companies Act (71 of 2008)

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