REGULATION OF JOINT-STOCK COMPANIES IN THE 19TH CENTURY HUNGARY
REGULATION OF JOINT-STOCK COMPANIES IN THE 19TH CENTURY HUNGARY

Summary/Abstract: The article traces the historical development of the regulation of the joint-stock company in Hungary, beginning with the early 19th century when this type of company was first attempted to be regulated and until the 1870s, when fully new norms in line with Western regulations of the period were adopted. We document the beginnings of regulation in the field of joint-stock companies, demonstrating that the first successful attempts at such regulation coincided with the start of the industrialization process of Hungary in the 1840s. The joint stock company was a necessary tool for economic development, especially after the Austro-Hungarian compromise in 1867. It is ascertained that the first Act dealing with joint-stock companies in 1840 already contained the basis for the successful functioning of such companies, by regulating public subscription, voting rights, how statutes were established and the payment of dividends. The modernization of the joint-stock company in the 1870s and through later norms paved the way for the general use of bearer shares and established how capital is concentrated for the creation of the company. It also ushered in the possibility for shares to be easily exchanged, thereby responding to the joint-stock boom which followed the Austro-Hungarian compromise in 1867. In conclusion, the regulation developed in the examined period withstood the test of time, being applied until the establishment of the Soviet-type dictatorship at the end of the Second World War.

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