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usiness fraud. 42 In 1825, the Bubble Act was repealed and the history of modern
company law in England began. 43 The rising numbers of joint stock companies had
also witnessed a new form of insolvency, i.e. the winding up of companies and
partnerships. 44
English law provides the foundation for its former colonies including Australia, New
Zealand and Malaysia. These former colonies initially relied on the English law,
including company law, as models. Over the past century, the relative importance of
English law has varied depending on the domestic circumstances at the time.
Nevertheless, continued reliance on English law as templates provided opportunities
for these jurisdictions to develop over time their own legislation peculiar to their
business cultures. In the area of insolvency law, however, dependence on English
legislation remains and has often been referred to and followed by the Law
Commissions, particularly in the area of company rehabilitation.
The company laws in Australia in the early stages were based on the English law and
its legislation was mostly replicas of English Companies Acts. This practice was
convenient and advantageous since most companies in Australia at the time were
branches of UK companies of which they later became subsidiaries. 45 The adoption
of the UK legislation allowed for the formation and operation of limited liability
companies both in the UK and the colonies. 46 Thus, the early laws were adopted
mostly from the UK in order to cater for the needs of British interests in the colonies
rather than for the domestic companies which operated at smaller scales. 47 Any
42 Farrar and Hannigan above n7 at 18.
43 Ibid.
44 Ibid.
45 John Farrar Corporate Governance Theories, Principles and Practice (3 rd ed., Oxford University
Press, 2008) at 12.
46 Rob McQueen “Limited Liability Company Legislation-The Australian Experience” (1991) AJCL
22 at 24.
47 Ibid.
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