Depersonalization of Business in Ancient Rome
University of Amsterdam - Amsterdam Center for Law & Economics (ACLE)
University of Amsterdam - Amsterdam Center for Law & Economics (ACLE); Tinbergen Institute
Enrico C. Perotti
University of Amsterdam - Finance Group; Centre for Economic Policy Research (CEPR); Tinbergen Institute
December 22, 2009
Oxford Journal of Legal Studies, Vol. 31, No. 2, 2011
Amsterdam Center for Law & Economics Working Paper No. 2009-14
A crucial step in economic development is the depersonalization of business, which enables an enterprise to operate as a separate entity from its owners and managers. Until the emergence of a de iure depersonalization of business in the 19th century, business activities were eminently personal, with managing partners bearing unlimited liability. Roman law even restricted agency. Yet, the Roman legal system developed a form of de facto depersonalized business entity, where depersonalization was achieved by making the fulcrum of the business a non-person: the slave. Although radically different from a legal perspective, this format exhibited all the distinctive features of modern corporations, thereby providing for a functional equivalent of the modern corporate form. The development of the de iure format was hindered by strong cultural, technological and institutional constraints. In contrast, slave-run businesses exhibited features that were largely compatible with these constraints and emerged along the path of least resistance to legal change. The end of slavery and the fall of the Roman Empire closed off this alternative path of legal evolution; consequently, the modern corporate form could only appear once these constraints had been overcome.
Number of Pages in PDF File: 28
Keywords: depersonalization, limited liability, entity shielding, Roman law, slave
JEL Classification: D23, G30, K12, K22, N00
Date posted: December 27, 2009 ; Last revised: October 6, 2011
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