Structure and Nature of the Trading Companies

The English East India Company, formed through amalgamation of several rival companies at home, was controlled by a board of directors whose members were elected annually. The shareholders of the company exercised considerable influence, as the votes could be bought and sold through purchase of shares. The trading companies of France and Portugal were largely owned by the State and their nature was in many ways feudalistic.

In the French company, the monarch had more than 60 per cent share and, its directors were nominated by the monarch from the shareholders who were supposed to carry out the decisions of two high commissioners appointed by the government. The shareholders took very little interest in promoting the prosperity of the company, because the State guaranteed a dividend to the shareholders. The lack of public interest could be inferred from the fact that between 1725 and 1765, there was no meeting of the shareholders and the company was simply managed as a department of the State.