Understanding Chartered Companies
The common element in British chartered companies at all stages of their development is the possession of a special charter from the Crown, granting them certain trading privileges in a particular locality, to be exercised subject to varying degrees of control by the Crown.
There appear to be three phases in the development of chartered companies.
Associations of individuals, emanating from early trading guilds, and enjoying a monopoly of trade in the export of English products to other European nations.
England was the first to grant a charter to a foreign company, the Hanseatic League, and, later, charters were granted to English companies trading in the Baltic, Russia, and Turkey.
Chartered associations possessing delegated sovereign powers of extraterritorial jurisdiction in the countries in which they traded. These were due to the impulse given to foreign trade by the discovery of the New World and the opening of trade routes to the Indies and America.
Their object was to foster commercial intercourse with distant countries. The Russia Company, the Turkey Company, and the Eastland Company developed such relations with Russia, Turkey, and Persia. But the more important were the hudson's bay company, and a number of other chartered companies that opened up the British North American colonies, and the famous east india company. The significance of these companies lies in the part they played in the building up of the foundations of the British colonial empire through their acquisition of territory either by the process of planting and settling in unoccupied regions or by conquest or cession of occupied land, as in the case of India.
The purely joint-stock companies possessing no delegated sovereign powers, and trading under the direct control of the British government. This phase of their development, or rather revival, was the expression of the desire for colonial expansion and commercial prosperity universally prevalent among European nations towards the end of the 19th century. The principal British chartered companies formed during this period were the Royal Niger Company chartered in 1886 and bought out by the government in 1899 for £65,000; the Imperial British East Africa Company formed in 1889 to exploit Uganda and neighbouring districts, which fell into financial straits in 1892, with the result that Uganda became a British protectorate two years later; the British South Africa Company, chartered in 1889, and owing its origin to the activities of Cecil rhodes, who secured various mining concessions from Matabele chiefs; and the British North Borneo Company, incorporated in 1881 to take over the concessions and territory acquired from the sultan by a syndicate formed in Labuan in 1878. The rights of the British North Borneo Company were bought out by the Crown in 1946 when Borneo became a Crown colony.