Limited Liability Company as one of the things that helped to create the modern world

The well known BBC podcast by Tim Harford on 50 inventions, ideas and innovations which have helped create the economic world focuses this week on the limited liability company. This recommended podcast tells in 9 minutes the importance of limited liability for the pooling of capital and introduces the listener through (a somewhat anglocentric) history of the limited liability company to economic concepts such as agency cost.

See for other historic views on the company previous posts on:

• Dutch East Indies Company;
• The effect of formation rules on the functioning of capital markets: lessons from history;
• Quis custodiet ipsos custodes: agency problem in business, finance and politics;
• the role of trust law;
• subordination; and
• Our own private Delaware: the ‘partnership en commandite’.