Great Company Charters – Masterpieces of Legal Practice
Private Law Gazette 2/2019
They broke ground in new entrepreneurial territory, facilitated international connections and carved room for new economic sectors. The company statutes that accompanied the rise of the Medici, Fugger, Siemens and Rockefeller families paved the way for the expansion of these empires. Tested by the challenges of business practice and honed by strategically necessary adaptation, the statutes became innovative models for legal rules governing partnerships and corporations. Their authors were lawyers and jurists who, rather than endeavouring in the creation of legislation or court jurisprudence, served as consultants at the side of business leaders.
"One might readily think that scholarship and education would pay due attention to company charters, but this is far from the case," says Institute Director Holger Fleischer, who has accordingly designed a research programme to close this gap. "Disregarding a handful of exceptions, little is known about the statutes of prominent private-law entities. Textbooks and commentaries offer little information and formbooks lack the nuance of the actual cases to which they relate." In fact, the spectrum of potential academic research ranges from prominent Renaissance-era trading companies to protagonists of the industrial revolution, such as the Siemens AG and the Standard Oil Trust, to modern Internet giants like Alphabet Inc. and Facebook.
When the brothers Ulrich, Georg and Jakob Fugger in 1494 concluded their first written partnership agreement contract, the notion of modern commercial law legislation lay far off in the future. Yet the agreement’s detailed specification of the rights and obligations of the partners leaves many of the view that the resulting entity was an early prototype of an open commercial partnership.
A strong sense of family was also the driving force behind the emergence of the Siemens AG as a multinational corporate group. The journey from the telegraph construction company known as Siemens & Halske, founded in 1847, to the company’s initial public offering ran the course of fifty years. It was influenced by an internationalization strategy that served to co-found the "Made in Germany" legend.
The era of "big business" was heralded by the Standard Oil Company, founded in 1870 by John D. Rockefeller. Within a few years the company had expanded into 13 states and controlled 70% of the world market. In avoiding the then tightly meshed regulation of corporations, a complex network of companies had emerged that became increasingly difficult to manage. Added to this was the risk of multiple taxation by different states. A new trust design was seen as a means of relief, and the subsequently authored Standard Oil Trust Agreement would later be regarded in business annals as the "mother of all trusts".
In addition to masterpieces in the history of contractual drafting, Holger Fleischer and his team, together with Sebastian Mock of the Vienna University of Economics and Business as well as other authors, also examine more recent corporate creations, looking at the company statutes of ADAC e.V. or the charter of Bucerius Law School gGmbH. Of further interest are coming analyses of statutes of modern global entities such as Daimler Chrysler AG, Air Berlin PLC. & Co. Luftverkehrs KG, or FIFA.