The foundations of the modern market economy were laid: corporations. Before the 17th century, if you owned a business, you were responsible for the entire enterprise. Chartered Companies introduced the concept of “limited liability.” The corporate entity was responsible for the debts, not the individuals who owned the business. Their exposure was limited to their initial investment. Thus, the risk was shifted from the debtor to the creditor. This greatly increased investment, entrepreneurship, and the stock market.
