Shielding assets in nineteenth-century partnership contracts

In a recent publication, I argue that in early nineteenth-century Antwerp partnership contracts were used not only for small businesses but also when heavy investments were made and for companies involving non-relatives. This argument runs counter a majority view that only corporations (sociétés anonymes, Aktiengesellschaften) which were considered as legal persons, were feasible vehicles for business ventures. In Antwerp, courts actively sought to mitigate strict arguments concerning partnerships that were found in legislation and legal doctrine, and even turned them up side down in order to protect non-active partners. Court practice resulted in reducing the risks of expropriation. For example, the rule of joint and several liability of associates was not applied when the partnership was "irregular". Since more than half of partnership agreements remained unregistered or unpublished, this was particularly relevant in commercial practice. Moreover, partnerships had the advantage that they facilitated reciprocal monitoring among associates. As a result, with disadvantages of the black-letter-law being reduced in judicial practice, partnerships proved the best organizational option for entrepreneurs. In this regard, the nineteenth-century practices were not much different from what was going on in the Old Regime.

See: D. De ruysscher, “Partnerships as Flexible and Open-Purpose Entities: Legal and Commercial Practice in Nineteenth-Century Antwerp (c. 1830-c. 1850)” in De ruysscher, D., Cordes, A., Dauchy, S. and Pihlajamäki, H. (eds.), The Company in Law and Practice: Did Size Matter? (Middle Ages-Nineteenth Century), (Studies in the History of Private Law) (Leiden: Brill, 2017) pp. 158-202.