Did corporations exist before the civil war?

Answer 1

A few did, but it was much more difficult to obtain a corporate charter in those days. Nowadays all it takes to make a corporation is to write up a certificate of incorporation, amounting to maybe a page and a half of boilerplate, file that with the secretary of state in the state where you want to do business with the appropriate fee ($90 in my state), wait to get the certified copy back, and file that at the county courthouse in the town where you'll be doing business, and you have a corporation. You also want to buy a "corporate kit" from a business supply company, tailored for your state, complete with a corporate seal for impressing the embossed seal of your corporation into appropriate documents, like a notary's seal, very official looking. Following the guidelines of the corporate kit will keep you from losing your "corporate shield" of limited liability. This limited liability was the reason legislatures of the states were reluctant in the 1800s to make it easy to incorporate. So long as the corporate formalities are properly observed, anyone injured by the corporation can only sue the corporation, and can recover money damages only from the assets of the corporation. A plaintiff can not go after the assets of the shareholders, officers of the corporation, or of the directors. But if a plaintiff can show that the corporate formalities have not been observed, then he can "pierce the corporate veil" and go after the assets of officers, directors, and even shareholders, who in small corporations today are usually the same people, and are the people, after all, who ordered done whatever it was that resulted in the plaintiff's injuries.

To incorporate today, you merely state in the certificate of incorporation you file with the secretary of state in the state capital that the purpose of the corporation is "any lawful purpose". In the 1800s, those who did succeed in incorporating had to be very specific about exactly what business the corporation was going to be doing. If a corporation engaged in activities outside what it was chartered specifically to do (without obtaining an amendment to the corporate charter from the legislature to do so, and seeking which of course provided the occasion for state legislators to extract a new round of bribes and emoluments), this was grounds for "piercing the corporate veil". And in the 1800s, you didn't just mail in a certificate of incorporation. You had to get an Act of Incorporation passed by the state legislature to obtain your corporate charter. So if you were well-connected, or rich enough to spread bribes around, maybe gift some shares of stock of the new venture here and there, you stood a much better chance of getting your bill through the legislature (essentially getting a law passed) than you would if you were just some schmuck nobody knew, who hadn't even bothered to show his appreciation in any material way. So, basically, only some banks, railroads, canal companies, steamship lines and other large scale ventures, the successful creation and operation of which could be claimed to provide benefits to the public at large, were allowed to operate with the corporate limited liability. Of course, many of these turned out to be run by the biggest crooks and swindlers around, who had the determination to do what it took to obtain a corporate charter.