The British Parliament passed the Bubble Act in 1720 to curb speculative companies after the South Sea Bubble.
The law, formally called the Royal Exchange and London Assurance Corporation Act 1719, restricted companies from operating as joint-stock corporations without a royal charter or an act of Parliament. It was enacted during the speculative frenzy surrounding the South Sea Company and other ventures.
The measure did not simply ban every speculative investment. Instead, it targeted unauthorized corporate structures and attempted to reinforce the privileges of chartered companies. Enforcement was inconsistent, and the legislation did not prevent the bubble from collapsing.
The act became a famous example of regulation following a financial mania. It remained in force until 1825, although its practical effect changed over time. Modern company law developed through later legislation rather than directly from the Bubble Act alone.