This chapter analyzes ancient Rome’s law of business entities from the perspective of asset partitioning, the delimiting of creditor collection rights based on the distinction between business assets and personal assets. Asset partitioning, which is an essential legal attribute of modern business forms such as the partnership and the business corporation, reduces borrowing costs by simplifying credit-risk assessment and expediting insolvency proceedings. The chapter finds that ancient Roman business arrangements, such as the societas and the slave-run business endowed by the slaveowner with a peculium, did not give business creditors the first claim to business assets, making these forms of organization non-entities according to the criterion of asset partitioning. It appears that the only true legal entity used to form profit-seeking firms was the societas publicanorum, which roughly resembled the modern limited partnership. But use of that form was generally confined to firms that provided public services under contract with the state. Moreover, the societas publicanorum was essentially a creature of the Republic, and was largely abandoned during the Empire. Although Rome had a complex economy and sophisticated commercial law, and was familiar with most of the types of asset partitioning seen in modern legal systems, it ultimately failed to develop legal entities for general use in commerce. Apparent reasons include the Roman aristocracy’s disparagement of commerce, the emperors’ wariness of strong organizations outside the state, and the society’s continuing reliance on the family—a durable and complex legal entity in its own right—to handle many commercial needs.
Trust law as fiduciary governance plus asset partitioning