Corporate Structures: Limited Liability and Corporations
**Company Bodies**
Consist of:
- General Board: This is the body of deliberation and decision. Matters the Board can address include: censorship of social management, approval of annual accounts, application of profit for the appointment and dismissal of directors, and amendment of the statutes.
- Directors: The management of the company may be entrusted to a single administrator or a Board of Directors. Administrators have to meet certain requirements:
- May not engage in similar kinds of trade that are the subject of society.
- Hold office during the time period stipulated by the charter and may be removed at any time by the General Meeting.
- To carry out the annual accounts, they must follow the rules of corporations.
- No need to have the status of partners.
**Corporation**
A corporation is a purely capitalist society, and the personal conditions of the members have no relevance; the capital is the only important element. It is the kind of society that is better suited to the needs of large enterprises.
**Features**
- The number of partners for the constitution may be one or more, whether natural or legal persons. When there is a single partner, they are called sole proprietors.
- The responsibility of the partners is limited to the capital contributed.
- The minimum capital formation is 60,101.21 euros. This capital is divided into registered shares or bearer shares. Such companies can be created by simultaneous formation or by successive formation.
- The name should be formed by the name of the company followed by “Company” or the initials “SA”.
- The transfer of shares is free once the company is registered in the Commercial Register.
- This company is taxed on its income.
**Formation**
A corporation must be constituted in a public deed that must be registered within two months in the Registry. In the charter, among other data, the articles of association should be included, and they must contain at least:
- The name of the company.
- Social order, determining the societies within it.
- Registered office.
- Social capital, stating, if applicable, the part of its value paid and the form and deadline to meet capital calls.
- The number of shares into which the capital is divided, nominal value, class, and series.
- The method or ways of organizing the administration, under the terms established by law.
- Other lawful agreements and special conditions that the partners see fit to establish.
**Company Bodies**
- General Board: A meeting of the members which decides on important business issues. There are three types of meetings:
- Ordinary General Meeting: Meets in the first six months of each year to discuss corporate management, approve the previous year’s accounts, and decide on the application of results. Must be convened by the administrators.
- Extraordinary General Meeting: Every meeting that does not meet the above requirements. Therefore, there may be several per year and at any period thereof. Should be convened by the administrators.
- Universal General Meeting: This meeting is understood and validly convened to discuss any matter, while all the capital is present and the participants unanimously agree to its conclusion.
- Directors: The direction of the company may be entrusted to a single administrator or a group of persons, i.e., a Board of Directors. Administrators are appointed by the General Board and must meet certain requirements:
- Need not be shareholders.
- Must carry out the annual accounts within a maximum period of three months from the year’s end.
- They may not engage, as an employee, in the same kind of trade that is the subject of the company.
- Exercise their post during the time period stipulated by the charter; they may be removed at any time by the General Board.
- Respond to the company, shareholders, and creditors for any damages caused by actions contrary to law or statute.
**Shareholders and Shares**
Shareholders are the owners of one or more shares of the company, so they own it. Among others, their rights include:
- Right to participate in the distribution of social benefits.
- Pre-emptive rights on new share issues.
- Right to attend and vote at meetings.
- Right to challenge social arrangements.
- Right to information on matters to be discussed at the shareholders’ meeting.
Shares are a most important part of corporations. The capital of a corporation is divided into equal parts, and each part is called a share. The contributions of capital of a company are represented by certificates or by means of book entries. Titles are physical documents; book entries are accounting entries that show the number of shares held by each partner and the successive transmissions. If the shares are listed, it is required that they are entered into consideration.