Commercial Companies: Structure, Elements, and Characteristics
The Personality of Commercial Companies
Commercial society, the most appropriate way to organize companies, can be understood as the legal and business structure. A commercial society, like any body, has its own personality and can exercise rights and obligations. It is a legal entity, acting through one or more individuals who represent it.
The trading company has its own capacity to act through a representative, equity that is not liable for the debts of individual partners. The debts stick to the social capital and have its own name and address.
Elements of a Commercial Company
Subjects (Partners)
Those involved are called partners. A society may be composed of members who are natural persons and other commercial companies that are already established and functioning.
Consent
The parties involved should provide real and genuine consent.
Capacity
Members must have full capacity to enter into commercial transactions, in addition to free administration and disposition of their assets. They should be able to sell, provide mortgages, pledges, etc. (Note: 18 years old is a special offer.)
Subject (Commitment)
This is the commitment of partners to undertake a joint project to operate as a legal entity distinct from its members.
Form
Formal and must comply with two requirements: be in writing, by public or private instrument and join the General Inspectorate of Justice. If there is any reform, it must meet again with both formalities.
Concept of Commercial Society
A commercial society is where two or more people meet to organize under some of the legal forms provided by law, make contributions to apply to the production or exchange of goods or services, are obligated to participate in the benefits and bear the losses.
Specific Elements of a Commercial Society
- Diversity of people
- Development of a common project
- Working as equals, or affectio societatis
- Authenticity
- The contributions that make up the social capital
- Production or exchange of goods and services
- Participation in profits and in the losses
- Organization
Plurality of Persons
Commercial companies should be formed by two or more people. The plurality of members, although only two people, should be respected at all times.
Affectio Societatis
The willingness to act together is the affectio societatis, which cannot be missing in any society. This is revealed when the deal is equal between the partners and active collaboration to develop the project. The requirement of this paragraph refers to the idea of working together and cooperation on an equal footing.
Typical Characteristics
The society is typical as they may be solely one of the few ways that the law regulates. Both partners and third parties that contract with the company have the legal security of knowing what those rules are.
Capital Contributions
This means that all partners are required to make contributions of capital when the society begins functioning, as well as in the case that the company needs to expand its capital, which must be approved by the partners concerned.
Production or Exchange of Goods and Services
The common purpose of society is the production or exchange of goods and services for profit.
Participation in the Profits and Losses
All members, by category and the contribution they make, are going to be reflected at the end of a period of losses or gains.
Organization
A company whose members have unlimited joint and several liability, i.e., they respond with all its assets for corporate debts, must have a name. This is integrated only with the name of one or more members.
In contrast, societies whose members are not liable for corporate debts to the private property, you must use a company name. The name may be an invented name or the name of any person but not a partner.
Registered Office
The address indicates the city or town where the company operates, while the head office is identified by a street number of that city or town. In the office usually are the managers of the company, although the manufacture of products is made elsewhere.
The Social Object
The object of society is in the business categories as possible and lawful society can develop, and must be specified in the social contract. The object refers to the intention of the partners to create or constitute a legal person. The object must be determined, possible, and lawful.
The Term of Society
The law requires that, by forming a partnership, the partners set the terms of its duration. Whatever the deadline, it can be changed in the social contract.