Commercial Law: A Comprehensive Guide to Commercial Practices, Merchants, and Companies in Chile

Posted on Aug 25, 2024 in Law & Jurisprudence

Commercial Practice (Article 4)

Commercial practice is the constant repetition of a uniform standard of conduct by members of a community united in the conviction that it corresponds to a legal necessity.

Commercial practice, related to trade, refers to commercial transactions and commercial law. However, the practice differs from usual civil law in the following ways:

In civil law, practice is not law. However, where the law refers to it, a law for practice in business law supplements the silence of the law under Article 4 of the Commercial Code, in Silence Law.
The usual interpretation, since it is also used to determine the meaning and scope of words used in science or art, under Article 6 of the Commercial Code.
The Commercial Code also contains rules on the practice test (Article 5 of the Commercial Code). In contrast, civil law does not.

Custom in the Code of Commerce

As mentioned, the Commercial Code provides rules on practice (Articles 4, 5, 6°). Article 4° refers to custom to fill the silence of the law and states that the facts constituting it must meet the following requirements:

Be uniform
Be public (not private)
Be executed in the republic or in a particular locality
Be reiterated for a long period

Trade Events

Preliminary Matters by Reason of Acts of Commerce

Possibility of Parties Conferring Trade Status to an Act of Commerce: On this point, the doctrine indicates that autonomy could not apply here because the “consequences” of an act considered commercial “are of public order.” Therefore, the parties cannot affect their application.
The Principle of Accessoriness: Don Julio Olavarria Avila tells us that the law provides for this principle as recognition that applying the objective criterion in all situations is impossible. It is a transition between the objective and subjective criteria. The approach is to determine, whether civil or commercial, by analyzing an act that does not have that quality individually but guarantees that it accesses an activity or act of that nature.

Accessoriness in commercial matters is broader than the incidental nature in civil matters. In civil matters, the accessory is intended to ensure the fulfillment of a principal obligation, e.g., pledge, mortgage. In commercial matters, it is broader because it includes not only civil accessoriness but also economic accessoriness, considering a civil act commercial because it accesses an act of this nature.

Legal Source: The legal source of this theory is found in Article 1° and 3° n° 1, clause 2 of the Commercial Code.

Article 1, in its second part, includes the incidental nature from the civilian point of view, indicating or referring to the obligations undertaken by non-traders to ensure compliance with trade obligations, e.g., pledge, mortgage of ships.

Article 3 No. 1, clause 2, considers the economic accessoriness, stating, “But are not acts of trade or exchange the purchase of objects to complement the main and ancillary industry is not commercial.” A review of the article’s wording shows that it relates to the incidental nature of a civil action for trade. However, the doctrine has expanded to consider this a commercial civil “mercantile law” act.

Mixed or Dual Character Acts: These are considered civil for one party and commercial for the other. This is possible, as a legal relationship may be analyzed from various points of view.

The legal consecration of this principle is found in Article 3, subsection 1, “are acts of trade as part of both parties of part of one of them.”

Acts of Chilean Trade Law (Article 3)

The acts of trade are found in Article 3, and this article has been classified in the following ways:

The act of trading is not defined in the Code. However, the doctrine defines it as “an act of mediation carried out for profit and whose purpose is the circulation of wealth.”

Classification of the Acts of Trade

Commercial transactions set forth in Article 3 are subject to various classifications. Considering the spatial area that is executed or referred to, they can be:

We distinguish between terrestrial commercial transactions (numbers 1 to 12 inclusive and 20) and sea (numbers 13 to 19):

It should be stated that the events on Earth are freshwater for these purposes.

Terrestrial (Nos. 1 to 12). These, in turn, can be subclassified:
1. Acts for which qualification is serving the intent of the person who runs, which are included in Nos. 1 to 4 of art. 3:
  - “1. ° The purchase and exchange of personal property, made with the intention to sell, exchange, or lease in the same way or in another language, and the sale, exchange, or lease of these same things.”
  - “2. ° The purchase of a commercial establishment.”
  - “3. ° A lease of personal property with the intention to sublease made.”
  - “4. ° The committee or commercial mandate.”
2. Acts of trade that are made by companies, which correspond to the acts set forth in Nos. 5 to 9 and 20. This is a group of acts that are done business because economic organizations – known legal firms. Corporate events are the following:
  - “5. ° manufacturing companies, manufacturing, warehouses, shops, bazaars, inns, cafes, and other similar establishments.”
  - “6. ° The land transport companies, rivers, or waterways.”
  - “7. ° tank companies goods, supplies or supplies, business agencies, and hammers.”
  - “8. ° The public entertainment businesses, subject to police measures to be taken in to the administrative authority.”
  - “9. ° The ground-based insurance premium, including those that ensure goods transported by canals and rivers.”
  - “20. ° The construction companies of real estate by adhesion, such as buildings, roads, bridges, canals, drains, industrial facilities, and other similar of the same nature.”
3. Acts of formal trade. They are always trade, whatever the person who runs and encouragement leads her to make them. Your merchantability is absolute, for the provision of the law. The article points out. 3 n ° 10.
4. Those in which it addresses the criteria of income, which are contained in Nos. 11 and 12 of art. 3:
  - “11. ° The operations of bank, brokerage, and exchange.”
  - “12. ° brokerage operations.”
Maritime (Nos. 13 to 19). We must remember that all acts are trading sea, as appears to No. 16, trade all contracts estimated “(…) concerning maritime commerce.”

Merchants

Merchants are regulated in Book I of the Commercial Code, in article 7, which contains a definition of what is meant by merchant: “are traders who, having capacity to contract, they trade their usual occupation.”

The article indicated we can conclude that the requirements for being a trader are:

Ability to hire
To trade or carry out acts of commerce
That the above is conducted professionally
Acting in its own name (required doctrine)

Accidental Execution of Acts of Trade

Article 8 tells us that “it is not accidentally a trader who executes an act of commerce but is subject to trade laws as to the effects of the act.” It is said that this article supplements Article 7 and confirms the idea that the requirements of Article 7 should all be present to talk about a trader. It is said to be a consecration of our country is still the objective criterion for applying commercial law. It reiterates the idea that determining the effectiveness of commercial law is the act and not the person who does it.

Company

Under the doctrine, the company: “It is the organization of production factors for lucrative purposes.”

Others have said it is an organization composed of several factors, including the employer’s activity, the work of all its dependents, and the assets necessary to achieve its ends.

Generally, the notion of craftsmanship uses objective and subjective factors. Among the objective factors are the set of goods the employer uses to carry out its business. Within the subjective factors are the activity of individual employers and their dependents.

Characteristics of the Company

It is an entity belonging to the realm of legal and economic; it is an organization designed to achieve an economic purpose.
It is organized as they plan to get a result according to a project previously implemented rationally.
Your professional activity
It is intended to produce goods or services spend.

The employer, in turn, is the natural or legal person itself or through whom it exercises and develops leaders to name a constitutive activity of the company and is the holder of the rights and obligations resulting from this activity.

Do not confuse business with society since one of the ways the company is precisely through a society. However, it can perfectly be a company formed by a natural entrepreneur (natural person).

The businessman is a businessman, so he must comply with Article 7 and after the Commerce Code.

Partnership Agreement

Defined in Civil Code section 2053 et seq.

However, this definition lends itself to some doubt: “As for the legal nature of the Company.” There are two main theses:

Says that the legal nature of society is a contract. They rely on the definition of Article 2053 of the Civil Code. Therefore, they must meet all requirements for a contract.
Says that the legal nature of society is an institution. “Meeting people organized steadily to fulfill a common purpose.”

They are based on paragraph 2 of the definition of CC. When it comes to the legal person.

There is another theory, the eclectic. It says that society has the characteristics of a contract and an institution.

The contract is of particular importance at the constitution of society, whereas the institution is essential for its function. It relates to third parties through its organs, such as the directory or administrator, and is endowed with personality attributes, except marital status.

Requirements of the Company

As society has features of the contract, it must comply with all requirements of the convention:

CONSENT, wills agreement faultless
Capacity to contract; however, adult children may be partners, but they must have legal authorization to be part of society Article 349.
Lawful purpose, also comes the notion of object as a synonym for Giro society activity states, which must be tendered for.
CAUSE

Must also meet special requirements:

Provision of Contributions
Benefits
The Courage to associate “societatis affective.”

1. Provision of Contributions

Article 2053, contribution follows the notion, stating that the partnership agreement, two or more persons to provide “something in common.”

In exchange for the contribution, the partner is the owner of a part of society. If the member corporation will surrender Shares, and if it is the partner companies have individuals of the interest of society.

Also, through the capital contribution, capital is formed, i.e., a sum of contributions. Capital is a debt that society has with partners, so accounting is a liability, even though, at the beginning of capital, it is equal to society the asset.

Money is the coin made.
In-kind, which is done through tangible or intangible assets and, in turn, can be in control or usufruct.
At work or industry, here is committed to providing social services for society, which should be evaluated in writing, and profit-sharing pact, which generally is in proportion to the contribution must be stated explicitly as it is for the partner that provided work, since otherwise would fall under the law the same as the member who had contributed the least.

2. Benefits

It’s pretty significant material advantage in money that can be a gain or loss savings. “Cheap rent.”

This element differentiates the company from other contracts or entities such as foundations or corporations.

3. Join-Animated

It consists of the willingness of partners to work actively in society and on an equal footing.

Types of Companies

They are classified according to several criteria:

1. Depending on Your Object

Civil Society
Trading Company, will be commercial if its object is one of the commercial acts listed in Article 3 of the Commercial Code, or if a special law assigns this role. In any case, it must be remembered that, in order, Corporations will always be commercial, but the twist is civil, so says Article 1 of Law 18,046 if the rotation is not an act of commerce will be civil society.

The consequences of either case, we find that the corporation will be considered at that merchant must comply with the obligations of traders.

Also, in the partnerships are:

Civil Society Collective, is one that is governed by the Civil Code and is consensual.
Commercial General Partnership, is governed by the Commercial Code and is solemn.

2. According to its Formal Characteristics

General Partnership
Limited Liability Company
Partnership
Corporation

The formal characteristics are as follows:

Name
Administration
Responsibility
Transferability of Social Rights

As its name: The name with the society, which is going to relate to others.

In the Partnership, in accordance with Article 365 of the Commercial Code, its name is formed by the name of all partners or any of them, plus the words Company, which can be abbreviated with the acronym “CIA” What has been completely elucidated with the law 19,499.
The Limited Liability Company: Your name is constituted in the same manner as above, but you can also make a reference to the object, and in both cases, the word should be limited.
In Corporations: Your name is made up of any words, but you should always include the words limited company or the abbreviation SA, so says article 8 of Law 18,046.
IN SOC en commandite: this company has two types of partners:
- Managing Partner: one who manages
- Limited Partner, provides capital.

His name, according to Article 476 of the Commercial Code, must include the name of the managing partner and, if they are several, all of them or any of them over the word company.

The limited partner should never be included in the name and if he agrees to be responsible for including social obligations.

As for his administration:

General Partnership: It can be managed by all partners, separately for each partner, any partner, or a third party stranger.
Limited Liability: As a rule, except that permitted by the doctrine that also includes a directory. Article 384 et seq. The Commercial Code regulates the administration of these societies.
Limited partnership, administered by the managing partner, Article 486 of the Code of Commerce.
Company: is administered by a board, without prejudice, that also choose a manager. Article 31 et seq. Corporations Act.

As Responsibility: It’s the way that partners respond to social obligations.

General partnership: the partners are liable jointly and unlimited social obligations Article 2065 and following the Civil Code and Article 375 and following of the Commercial Code
Limited Liability Company: In this case, the partners are liable for their contribution or the sum over these contributions been identified in the statute.
Limited partnership: the managing partner responds unlimited joint and several social obligations, and the limited partner responds only for its contribution unless they accept the inclusion of his name in the name or who performs acts of administration. 483-484-485 Articles Commercial Code.
Corporations: According to Article 1 of Law 18,046, only account for their contribution.

The assignability.

Regarding the transferability of social rights, i.e., whether the partner may transfer its rights, we have the following situations:

In the partnership and limited liability company, pursuant to Section 404 No. 3 trade partner code, it is forbidden to transfer their social rights. Therefore, if you can only assign the corporate charter is amended, and such deed of amendment must appear all partners authorizing the entry of a new member to society.
The limited partnership must distinguish between the managing partner and partner.

The managing partner can not transfer their rights in society, except under an amendment to the charter.

The limited partner can turn freely assign their rights in society (Article 482 Commercial Code).

With respect to the corporation, the general rule is that members can freely assign their rights in society, which result in actions (Article 14 corporations law). Do this, that in the closed corporation can put some limits on the transferability of social rights. However, the authors said that these constraints are unable to prohibit transferability, limited only. These limitations can be on price or to be offered to the other partners, and so on.

Capital Society and the Society of People

Those people are societies in which it was taken into account to link and form the trust in society is the other partner. They are partnerships, general partnerships, and limited liability companies, although it has some features of capitalist society, such as the limitation of liability of the partner.

A capitalist society is one in which what is taken into consideration is the possibility of partnering together a capital, so no longer as interested in how much you trust the other person, the typical capital company is a corporation, which generally are assigned rights freely. It has also said it could be society capital company limited by shares.

Another criterion is the so-called economic criterion, similar to the above because here, what is considered for classification societies are the reasons considered to form the company. We should let the general reason that you have to associate is the inability to achieve an end individually.

However, taking this reason into account, you must find different reasons to join. Now, if you form a partnership to complement the individual work capacity, it is said to form a partnership in which to look for a partner’s confidence.

If you want to get the capital to cope with or develop a large-scale activity, you are said to be limited companies.

If you want to share the risks primarily to prevent social debt might affect their heritage will be a limited liability company. Under the law can be formed 19,857 individual company with limited liability.