Instructions not Included: Spain´s Soc. Responsabilidad Limitada, 1919-1936

GUINNANE, T.; MARTÍNEZ-RODRÍGUEZ, S. (2018)”Instructions not Included: Spain´s Sociedad de Responsabilidad Limitada, 1919-1936.” European Journal of Economic History (accepted)

In 1919 Spain introduced the Sociedad de Responsabilidad Limitada (SRL), a new type of limited-liability enterprise form that combined elements of the partnership with features of the corporation.  The SRL resembled Germany’s Gesellschaft mit beschränkter Haftung (1892) or Britain’s Private Limited Company (1907). At first the SRL did not reflect new legislation; rather, an unusual feature of the Spanish Commercial Code allowed the Justice Ministry to authorize the form by fiat. The SRL did not have a statutory basis until 1953. Thus the thousands of SRLs formed between 1919 and 1953 had to rely on other sources for their rules. This paper studies the creation of actual SRLs: who used the new form, and how actors coped with the lack of a detailed legal framework. While similar in size to the ordinary partnership, the SRL from the start had distinctive ownership and capital-structure patterns. Entrepreneurs creating SRLs included contractual provisions that most often echo those of the partnership.  As late as the 1930s many SRLs used contractual language to assert the basic characteristics of the form, implying concern over the lack of legislation defining the SRL.