Making do with imperfect law: small firms in France and Germany, 1890-1935

Abstract

This paper uses a tight comparison of similar firms operating at the same time under ostensibly similar laws in two countries to study the implementation of new legal forms. The new forms are intermediate between limited partnerships and corporations. A French law of 1925 created the SARL, a new enterprise form modeled on the German GmbH of 1892. The new form was very popular in each country, partly because of the subtle balance it built in the relationships between managers and shareholders. Using samples of the articles of association for GmbHs and SARLs in the period 1892-1935, we show how German and French firms used these new frameworks, and how apparently minor differences in the provisions of each law can have significant implications for economic actors.

Additional details