Company Structures and Business Setup Fundamentals
What is a Company?
A company is a contract between two or more individuals who gather to conduct business. This contract creates a legal entity distinct from the partners who form the company. Moreover, this legal entity will own assets formed from the owners’ contributions, distinct from the personal assets of each individual partner.
Key Company Structures
Understanding Company Structures
A company is a legal entity formed by shareholders who contribute common capital. Each shareholder’s liability is typically limited to the amount of money contributed.
Limited Partnership Explained
A limited partnership is characterized by two types of partners:
- Limited Partners: These are equity partners who contribute capital.
- Managing Partners: These partners manage the contributions made by the limited partners to the fund.
A simple limited partnership is one where partners provide a background. This type of partnership is not widespread because those who contribute capital generally desire some involvement in its administration.
Limited Liability Company (LLC) Characteristics
Limited Liability Companies (LLCs) are characterized by being formed by a maximum of 50 partners. Their liability is limited to the amount of their contributions or a greater amount as specified in the company’s statutes.
Thus, if the business encounters problems, partners risk only the amount they have contributed to the company’s capital, not their entire personal property.
The Limited Liability Company is managed by all partners by default, but administration is often delegated to specific partners or third parties.
Essential Aspects of Business Formation
Organizational Considerations
Administration and Operations
The operations of a company, business, or project depend on several factors, with human factors being of paramount importance, as they involve both those who perform the work and those who direct it.
Organizational Structure and Hierarchy
The organizational structure provides a view of hierarchy and functionality, also helping to determine rights, obligations, and responsibilities.
Understanding Organizational Culture
When developing a business or project, understanding the organizational culture is crucial, as certain socio-cultural characteristics can hinder the development and execution of tasks.
Establishing Business Objectives and Operations
- Establish business objectives.
- Formulate objectives, policies, and support schemes.
- Identify and classify necessary activities.
- Group these activities based on available human and material resources, optimizing their use according to circumstances.
- Delegate necessary authority to the head of each group to perform activities.
- Link groups horizontally and vertically through authority relationships and information flows.
Legal Requirements for Business Setup
Choosing the Right Legal Form
Determine the legal form for the enterprise or business and justify its selection over other legal structures available in the current system. Points to consider:
- Election of members
- Affiliation of the partners
- Company Founders
- Deed, values, and inscriptions
Required Formalities and Permits
- The legal structure should reflect the name and personality of the partners or investors.
- Include details of required external consultancy services, specifying consultants, their specialties, and estimated costs.
- Outline all administrative and legal formalities required for company establishment, including:
- Municipal Business License (Patent municipal)
- SII Activity Commencement (Initiation of Activities SII)
- Stamping of Tax Documents and Ledgers (Timbraje of tax documents, ledgers)
- Activity Codes
- Specific Permits (e.g., SNS, MT, SAG, SESMA)