Classification of Companies, Directors, and Endorsements in Business Law
CLASSIFICATION OF COMPANIES
Depending on the Criterion:
Partnerships (Because of Who You Are)
- General Partnerships: (One type of partner)
- Limited Partnerships: (Two types of partners: collective and sponsors)
Capitalist Societies (Because of What is Provided)
- Company
- Limited Liability Company (LLC)
- Limited Partnership by Shares
APPOINTMENT OF DIRECTORS IN AN LLC
The General Meeting has the sole authority to appoint directors. Unless otherwise stated in the statutes, membership is not required for appointment. The appointment is effective upon acceptance.
Term of Office for Directors in LLCs
- Directors shall hold office indefinitely unless the statutes specify a term. In this case, they may be reappointed for one or more periods of equal duration.
- When the statutes specify a term, the appointment expires at the end of that term, at the conclusion of the General Meeting, or when the Board decides on the approval of accounts for the previous year.
ENDORSEMENT OF A BILL OF EXCHANGE
Who Can Endorse?
Any person with the capacity to be bound, including natural or legal persons. This can include individuals external to the original transaction, such as a guarantor, the drawer, the drawee, or the payee. The guarantor must specify the endorsee. If not specified, the law assumes the endorsement is for the drawee if no payee is present, or for the drawer if the payee is present. The guarantor’s signature and date are required. Endorsement is necessary throughout the lifespan of the bill of exchange.
CONCEPT OF ENDORSEMENT
The holder of the bill of exchange (endorser) transfers possession to another person (endorsee). This transfer of possession does not necessarily imply a transfer of ownership. While possession alone is insufficient for debt repayment, it can serve as a guarantee for fulfilling the obligation.
ANNUAL GENERAL MEETINGS (AGM) FOR CORPORATIONS
A validly constituted shareholders’ meeting (with a quorum) must be held to discuss and adopt resolutions by majority vote on matters concerning the corporation. Corporations must hold an AGM at least once a year, typically at the year’s end. However, the fiscal year doesn’t have to end on December 31st. The statutes should specify the closing date for annual duties.
REGISTRATION OF COMPANIES IN THE TRADE REGISTER
A corporation acquires full legal capacity upon registration in the Commercial Register. This registration grants power to individual entrepreneurs, except in shipping. Unregistered entrepreneurs cannot register documents in the Commercial Register or benefit from their legal effects. Registration should be sought within one month of obtaining the necessary documents for business operations.
FACTOR OF MERCHANTABILITY OR MANAGER
Concept and Power Granted by the Employer
Factor of Merchantability (Trade Factor): A general agent of the employer who manages the commercial establishment, conducting business and handling finances on behalf of the employer.
The Commercial Code requires the factor to have full capacity, be of legal age, and have the power of attorney granted by the employer. When acting on behalf of the employer, the factor must disclose the agency relationship. The power granted should be comprehensive, allowing the factor to conduct all legal transactions related to the establishment. If registered in the Commercial Register, this power must also be registered to ensure transparency and define the factor’s authority.