Legal Innovation in 19th Century Company Law: the Limited Liability Company

Abstract

The limited liability company is the newest and most widespread form of company, which has dominated the legal forms of companies in European countries since its appearance in the 19th century, becoming the most popular form of company for small and medium-sized enterprises. In the present study, I will examine the development of this form of company, specifically the German Gesellschaft mit beschränkter Haftung and the reasons for its creation. I will present the social, economic, geographical, and political reasons that gave rise to the urgency to create a new form of company. I will also highlight the main aspects that were the subject of debate when the GmbH was created. I will also briefly discuss the French model, which, alongside the German one, has had a major influence on the transposition process in the various countries. Last but not least, I will mention the initial stages in the continuation of the German model in the various European countries.