The commenda was a medieval contract which developed in Italy around the 13th century, and was an early form of limited partnership.[1][2] The commenda was an agreement between an investing partner and a traveling partner to conduct a commercial enterprise, usually overseas.[3] The terms of the partnership varied, and are usually categorized by modern historians as unilateral commenda and bilateral commenda, based on the share of contributions and profits between the partners.[4] The bilateral commenda was known in Venice as collegantia or colleganza.[5] The commenda has been described as a foundational innovation in the history of finance and trade.[4][6][7]
The commenda was a partnership between an investing partner (called the commendator, or socius stans) and a traveling partner (called the tractator or socius procertans).[8] The investing partner would provide the capital and the traveling partner would execute a commercial enterprise (generally maritime transport), the initial capital would be returned to the investing partner and the remaining profits would then be split.[9] The commenda was in essence as joint-stock company for the financing of a single expedition.[7] Depending on the contribution of the traveling partner, historians define two types of commenda:
Each individual contract was different, and sometimes the investment was a share in a ship.[10]
The origins of the commenda are debated, and likely derived from several sources including the Babylonian tapputûm, the Greco-Roman societas consensu contracta and foenus nauticum, the Byzantine chreokoinonia, the Muslim qirad, and the Jewish 'isqa.[11][12][1] Although it has precedent in these previous types of contracts, the commenda has peculiarities of its own.[1] The first mention of the Venetian colleganza dates to 1073, but it had been used since the 10th century.[13][8] By the 12th century, the commendatio had supplanted the colleganza in Venice.[8]
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