Roman Business Associations

Roman businessmen eager to launch a joint business venture could choose among three legal forms: the societas, the societas publicanorum, and the peculium of a commonly held slave. None of these forms led to large capital associations, let alone business corporations with publicly traded shares. The high level of instability is one of the key explanations: under Roman law, it was virtually impossible to commit capital for the long term and finance capital-intensive enterprises. The societas was inevitably liquidated following numerous dissolution events; its members could withdraw their money at any time; and private creditors were not barred from seizing common assets. The peculium was even more unstable: In addition to the dissolution events of the societas, the joint venture came to an end and all peculium items reverted back to the masters when the commonly held slave died. While the societas publicanorum developed into a more stable institution over time, during the same period, its business almost disappeared as state authorities stopped putting capital-intensive projects out to tender. How can a modern reader make sense of the picture that emerges from the sources? The present chapter suggests that reservations in the social and political setting, rather than economic factors or oddities of Roman legal doctrine, caused business associations to remain small. This is an important lesson from history, both for the theory of the firm and for the role that law plays in it.