The evolving concept of affectio societatis

Abstract

Under Roman Law, societas (partnership) was a consensual contract by which two or more parties agree to join their goods or services to carry out a common activity and to share the resulting profits and losses. For the constitution of a partnership, all partners should have the will to contribute to the common activity in question. This will, referred to as affectio societatis, is the intentional element in the definition of a partnership. It not only characterizes a partnership but also distinguishes it from other types of contract, especially from employment contract and contract for work and services. It is beyond question that modern corporate law is more complex than the Roman Law of partnerships. So although the concept of affectio societatis mostly persists, its scope and function are highly disputed. The question is to reconcile the classical definition of affectio societatis with the concept of partnership in today’s limited liability companies with a single shareholder or in publicly traded companies with a large number of shareholders.