What derive to mind when you hear the word " corporation ? " possibly a giant , faceless pudding stone ? pitiless captains of industry ? Perhaps you think of incorporated dirt likeEnronand WorldCom . In fact , the unscrupulous pillage done by some modern - daytime corporations picket in comparison to the activities carried out by one of the earthly concern ’s first corporations : theBritish East India Company(EIC ) .
The concept of corporations was first established under ancient Romanic law [ source : University of Virginia ] . But it was n’t until England emerged from the Middle Ages that it created what we recognize as the New corporate structure . It all began on Dec. 31 , 1600 , when Queen Elizabeth I allow a charter to the British East India Corporation , nominate the corporation " The Governor and Company of Merchants of London , trading with the East Indies . " The corporation conducted business in theEast Indies(land that we now consider India and the Middle East ) at the behest of the queen .
The East India Company established a few major precedents for mod corporations . But it also shaped the world in countless other mode . With both the fiscal andmilitarysupport of theCrown , the EIC served as an tool of imperialism for England . The company had its own privatearmyand raised soldier in the areas it subjugated . Its expansionism spur several warfare that raise at least two sovereign nations . Among its many title to celebrity ( and notoriety ) , the EIC indirectly build Yale University , helped create two country and was the world ’s large drug - address operation in the eighteenth century .
The company was ruthless in its pursuit for profits . Parliament even called the EIC tyrannical . However , without the EIC , England may have never build up into the nation it is today .
Read on the next varlet how this giant global bay window was created .
The Creation of the East India Company
When the British East India Company ( EIC ) was take shape in 1600 , there were already other East India Companies operating on behalf of France , the Netherlands , Spain and Portugal . Thanks to the naval route that explorerVasco Da Gamadiscovered , rich people from the Orient were pouring into Europe . With other country import fortunes in goods and dirty money , Queen Elizabeth settle England should get some , too . So she granted the charter for the East India Company .
Queen Elizabeth used more than just royal decree andcoffers(treasury investment firm ) to serve merchants and Internet Explorer found trade on behalf of England in the East . The charter she issued create the first officialjoint - parentage corporation . A joint - stock corporation is composed of investors who are granted share in a troupe . In getting even for their initial investments , stockholder are givendividends , or percent , of the company ’s profits based on the number of share the investor restrain .
Shares and dividends were not new concept in England . Twenty years prior to the EIC ’s charter , Queen Elizabeth was already a major stakeholder in Sir Francis Drake ’s ship , theGolden Hind . Although it ’s not sure how much she made from Drake ’s voyage to the New World , the captain himself made a 5,000 percent coming back on his initial investment funds [ source : Hartmann ] .
So a joint - stock corporation like the one Queen Elizabeth formed in the East India Company was n’t much of a financial leap . But it was the first of its variety , and following the establishment of the EIC , its Dutch , Gallic and other competitors followed suit . But granting charter to the EIC was n’t the only part of the image for modern corporations that Queen Elizabeth get up .
Under the auspices of her royal bureau , Elizabeth also limited the liability of the EIC ’s investor – admit hers . This made the company the world ’s firstlimited liability corporation(abbreviated as LLC in the United States and Ltd. in the United Kingdom ) . Under an LLC , the investors in a corp are grant protection from miss any more money than their initial investments in the venture . If the company goes under , the investors only lose the amount of money they put into the LLC . The company ’s outstanding debt are n’t divvied up among its investor [ root : IRS ] .
Queen Elizabeth cover any losses or debts owed by the East India Company with the purple coffers ; modern LLCs are subject to bankruptcy procedures , where creditors may be force to take pennies on the dollar or nothing at all if a tummy go under .
Although it take several decades for the East India Company to become truly profitable , once it did , the company rose to ball-shaped supremacy – both in business organization and in political science . In a symbiotic way , as the society grew in power , so , too , did England . So it ’s no surprisal that during its macrocosm , the company was at once involved in major geopolitical changes : The EIC literally changed the course of history . Two nations , India and the United States , revolt against East India Company rule , which lead to the formation of their current political structures .
Read how the company inadvertently created the United States on the next page .
The East India Company and the United States
American and British schoolchildren are instruct about the infamousTeaAct of 1773 , which lead to the disaffected Boston Tea Party . But incisively why theBostoncolonists threw thousands of pounds of Camellia sinensis into Boston Harbor may be less clear . It ’s actually due to collusion between the government and the East India Company .
The Tea Act was designed by Parliament specifically to aid the EIC unload the millions of pounds of unsold tea in its English storage warehouse . The Americas were the designated recipients ( like it or not ) of the surplus Camellia sinensis . The act was mean to enforce the EIC ’s monopoly on teatime in the colonies . It would be like the United States government push all of today ’s Americans to buy Apple reckoner only . at long last , the Tea Act countenance the EIC to drive its contender out of business . Colonists deemed this an unfair praxis – governance was supporting one commercial enterprise ’s interests at the disbursement of the familiarity – and it give raise to the famous catchword " no taxation without theatrical performance " [ source : Hartmann ] .
India also sleuth gyration to buck the yoke of imperialism . Their feat were focus on thwarting the East India Company and the British government . Read about India under EIC normal on the next pageboy .
The East India Company and India
Perhaps it was being place midway across the world from the East India Company ’s dwelling authority in London . Or peradventure it was the potential for wealth afforded by India ’s riches . Either way , Elihu Yale ( the benefactor for whom Yale University is named ) was bait into building his own smuggling operation . His pink slip from his post as the EIC regulator of Madras was a light sentence compare to the lot of others who ran afoul of the society .
Perhaps Yale flummox aside with his aliveness because of the workplace he ’d done on behalf of the EIC . Thanks tofactories(colonies or settlements ) incline by men like Yale , the East India Company was capable to subdue India and its tribal ruler . The company construct forts in India to put up its privatearmy . The EIC also raised soldiers from within the aboriginal populations . With the governance ofmartial rule(thegovernmentset up in a Din Land occupied bymilitary ) net profit could be garnered well . Perhaps the most profitable exportation for the company ’s India surgical procedure was opium .
By 1750 , the EIC had established control condition over India ’s most prolific sites of opium culture . The British export the opium toChina , which finally lead in two opium wars between the countries over the drug ’s importation . By 1793 , Britain had a monopoly on opium , and no Amerind grower was allowed to sell his crops to any other company [ generator : PBS ] .
The British colonialism carry out through the EIC was pretty brutal . It include the forceful seizure of nation and deposing of rulers . protection , taxis and loyalty were distill from ordinary citizens through method acting up to and includingtorture[source : Emory University ] . Ultimately , the British presence seek to be unsufferable for some Indians . A number ofsepoys(native Indians who join the EIC ’s militia ) revolted against the EIC ’s convention during theSepoy Rebellion of 1857 . Somehistoriansconsider this India ’s first warfare for independency , even though it was quelled by the British army . afterwards , Great Britain officially occupy the commonwealth . India would persist an English colony until 1947 , when it became a integral republic [ source : CNN ] .
The eventual instauration of modern - day India and the United States are but two major world events that have the East India Company ’s fingerprints . It would be nearly unimaginable to describe the entire bequest – both confirming and negative impact – that the East India Company had on the world . With lineal intimacy in so many different aspect of our world , perhaps the head is n’t " how did the East India Company change the reality , " but " how did n’t it ? "
