Business Entities and Contracts: A Comprehensive Guide
Bill of Exchange
Definition
A bill of exchange is a document containing an unconditional order from the drawer to the drawee to pay a fixed amount of money to the payee or their order at a specified time.
Persons Involved
- Maker/Drawer: Issues the bill of exchange.
- Drawee: The debtor who is ordered to pay.
- Beneficiary/Payee: The creditor who receives the payment.
- Acceptor: Acknowledges the order by signing the document.
- Endorser: Transfers the bill to a third party.
- Endorsee: Receives the bill by endorsement.
Promissory Note
Definition
A promissory note is a written document containing an unconditional promise to pay a specific amount of money to the beneficiary or their order at a specified date.
Persons Involved
- Subscriber/Maker: The debtor who promises to pay.
- Beneficiary/Payee: The creditor who receives the payment.
- Endorser: Transfers the note by endorsement.
- Endorsee: Receives the note by endorsement.
Employment Contract
Definition
An individual employment contract is an agreement where a worker provides personal services to an employer under their direction, and the employer pays for these services.
Employer Obligations
- Pay compensation
- Ensure equal treatment (non-discrimination)
Types of Employment Contracts
- Free Dismissal: The employer can dismiss the worker without explanation.
- Regulated Dismissal: The employer must follow legal requirements for dismissal.
- Labor Immobility: The worker cannot be dismissed except for resignation, force majeure, or a complex procedure.
Collective Bargaining Agreement
Definition
A collective bargaining agreement (CBA) is a contract between a union or group of unions and one or more employers, outlining terms and conditions of employment.
Sales Contract
Definition
A sales contract is an agreement where a seller transfers ownership of a specific item to a buyer, who pays a price in return.
Lease Contract
Definition
A lease contract is an agreement where a lessor grants temporary use and enjoyment of a property to a lessee, who pays rent in return.
Contract Termination
A contract is terminated when the employer informs the worker, or by mutual agreement, with the employer submitting a document for asset liquidation.
Business Entities
Definition
A business entity is a legal structure formed by two or more people to conduct business. It is a separate legal entity from its owners.
Types of Business Entities
Limited Liability Company (LLC)
Combines personal management with limited liability for partners. Social capital is divided into shares.
Limited Labor Company
An LLC with at least three partners, most of whom are employees. Non-working partners are allowed.
Corporation
Designed for larger businesses, allowing private investment.
Education Company
A corporation with at least three members (two must be indefinite employees). Non-working partners are allowed.
Collective Society
Formed by two or more partners managing the company equally. No minimum capital required. Partners have unlimited liability.
Limited Partnership
Has two types of partners: general and limited, with different rights and obligations.
Cooperative Society
Brings together people with common interests to achieve business goals.
Individual Limited Liability Company (ILLC)
Allows an individual to act with two distinct personalities, creating a separate patrimony for a specific purpose. The owner is always a natural person.
Commercial EIRL
A type of individual limited liability company for commercial activities.
SAC
Can conduct civil and commercial operations, except those reserved for corporations. Managed by an administrator with full powers.