Business Structures: Types, Features, and Legal Aspects

Posted on Jan 6, 2025 in Law & Jurisprudence

Economy Theme 2: Axioms of Individual Companies

An individual company is one where an individual has the legal capacity to be an entrepreneur. This typically means being at least 18 years old and having free disposal of assets.

  • No minimum capital is needed.
  • There is no separation between the firm’s assets and the entrepreneur’s personal assets.
  • The entrepreneur’s name can be freely chosen.
  • The entrepreneur must register for Social Security under the special self-employed regime.
  • Workers are liable for the company’s debts.
  • Legal Prohibition: Judges, magistrates, and active legal officials, as well as heads of government in economic or military roles, are prohibited from owning individual companies.

Civil Society Private

This is a contract whereby two or more people agree to share money with the condition of delivering the goods. Partners are taxed via Personal Income Tax. Legal agreements between partners are private.

Non-Market Company: A public-civil society is a contract between two or more people who pool resources and share profits, such as a professional group of doctors. The responsibilities of partners are subsidiary, joint, and unlimited, extending to all their personal belongings. Agreements are public and formalized through a public deed before a notary.

Community of Goods

This is a contract between several people to jointly manage a business’s assets. It has no legal personality.

Types of Companies

Partnerships

Personality-Based: Management is handled by partners, and personal qualities are more important than capital.

  • Collective: Member qualities are determined individually. All partners are liable for the company’s debts and are involved in management. No minimum capital is required.

  • Simple Partnership:

    • Two types of partners:
    • Collective: Unlimited, joint, and several liability.
    • Limited: Liability limited to capital contributions.
    • Minimum of two partners.
    • Membership cannot be freely transferred.
    • No minimum capital.

Capitalist Companies

Capital is more important than experience.

  • Partnership by Shares: Requires a minimum capital of €60,101.21. There must be at least two limited partners and one general partner. The company name can be chosen by the partners. These companies are subject to corporate tax.

  • Limited Liability Company (LLC):

    • Two or more partners.
    • Partners’ liability is limited.
    • Capital is divided into shares, with a minimum of €3,005.06.
    • At Formation: The company name and purpose must be defined.
    • Governing Bodies:
    • General Meeting: The decision-making body.
    • Administrators: The company can be managed by one person or a board of directors.

  • New Limited Company:

    • Maximum of five partners initially, expandable through share transfer.
    • Minimum capital: €3,012; maximum: €120,202.
    • The name must include a member’s surname and a unique alphanumeric code.
    • Offers tax benefits and streamlined company formation procedures.
    • Formation can be completed online in two days.
    • No need for a member record book.

  • Public Limited Company (PLC):

    • One or more partners.
    • Liability is limited.
    • Minimum capital: €60,101.21.
    • The company name must be registered.
    • Share transfer is freely permitted but subject to taxation.