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Abstract

This paper offers some tentative suggestions as to why Berle’s work has been read and interpreted so selectively in the United Kingdom. I suggest that this must be partly attributable to the historical developments in English company law that entrenched the notion of shareholder ownership claims. Specifically, unincorporated associations’ normative values—that members are owners and there is no distinction between small organizations with no share dispersal and large organizations with wide share dispersal—have a continuing influence on this entrenched notion of shareholder ownership claims. First, I provide an overview of the origins of English company law. Next, I address how the Bubble Act encouraged unincorporated businesses and shareholder primacy. In addition, I discuss the influence of unincorporated business concepts in the early Companies Acts. Finally, I conclude: Berle theorized that the disconnect between shareholder and company resulted in low shareholder entitlement and a corresponding “un-owned-ness” of the company; he further theorized that this could be the basis for social reforms. However, this was not the outcome in Britain. Instead, share dispersal was not a sufficient condition for the reconceptualization of ownership in Britain, given the strength of the legal shareholder entitlement model.