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The principle of a separation of ownership from management is what distinguishes sole traders, partnerships and other types of commercial organisations from companies. This principle, together with the principle of limited liability, allowed companies to raise sufficient capital to undertake the massive projects made possible by the industrial revolution. The average person would not feel happy about buying shares in Standard Bank if by doing so they immediately became liable for all its debts - no matter how unlikely its liquidation might be. Equally, the thousands of shareholders of Standard Bank cannot possible be directly involved in its management. So these two characteristics of companies allowed ordinary people to invest in them without any risk or obligation - beyond what they had paid for the shares. So companies could raise huge amounts of capital from hundreds of thousands or even millions of individuals which allowed them to undertake massive projects - like building a railroad across America.

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