Incorporation: critical analysis of whether it is a remedy or a mischief

Abstract

Pursuant to the claim that by the international community that economic stagnation in Zambia can be attributed to its poor economic institutions, the research shows that Zambia has some good institutions using the limited company as a case study. To adequately evaluate the value of companies as economic institutions, the research gives a historical discussion of the various business associations that emerged with special focus on ancient Rome, Medieval Arabia, medieval Europe and Britain, highlighting the forces that were at work in fashioning the business enterprises in these societies. The research goes further to discuss the value of entrepreneurship, which is sought to be established by good economic institutions; to encouraging economic development. It further highlights the various features that have emerged in history to facilitate entrepreneurial activity and discusses whether these are present in the limited company as known in Zambia. The research then proceeds to show how, using some of the identified features, the limited company has been used in Zambia's history to encourage economic development. The research highlights that in truth, the limited company is a good institution and does possess features that can encourage entrepreneurship and that the reason the limited company has not been very effective in facilitating entrepreneurial activity in Zambia is not because it is inherently defective. However, this notwithstanding, the research goes on to recommend ways of improving the limited company in Zambia such as updating Companies legislation by introducing codes of good corporate governance as well as introducing more to aid companies in financial distress to regain their profitability.