Free-Standing Companies in Tsarist Russia

Abstract

Abstract The majority of British companies involved in conducting business in Russia at the end of the nineteenth and the beginning of the twentieth centuries followed an identical organizational pattern. The distinctive feature of this pattern was the existence of complex, multilevel structures that included intermediary companies, special companies for financing, Russian-affiliated enterprises, and Russian and British banks. Many British companies that financed business in Russia were so called free-standing companies. This term was first introduced by Mira Wilkins, who defined a free-standing company as an ‘administratively as well as legally independent ‘ venture the purpose of which was to obtain capital by bringing together profitable or potentially profitable operations overseas with British investors seeking financial opportunities superior to those at home The free-standing companies would provide an institutional framework that minimized risks, managed the savings of British investors, and could attract foreign as well as British investment. Free-standing companies did not originate from a domestic manufacturing base. They were floated in the UK and had their head offices in London, but conducted business overseas. The difference between freestanding companies and investment companies was that the latter usually operated ‘ solely within Britain as institutional portfolio investors ‘.