Partnerships vs. Capitalist Companies: Key Differences

Posted on Mar 11, 2025 in Law & Jurisprudence

Companies: Personnel and Capital

The basic models of corporate organization are the personal model and the capitalist model. It should be noted that theoretical models are not usually found in pure form in almost any social form.

Characteristics of Partnerships

From the standpoint of equity, partnerships are characterized by:

  • A direct relationship between social equity and partners.
  • Responsibility of the members for their debts.

From the organizational standpoint, partnerships are characterized by:

  • The principle of self-organization, i.e., all shareholders have the right to participate in social administration or management.
  • The criterion of unanimity to adopt social arrangements. Consequently, every partner has veto power over acts of administration and amendment of the social contract.

The legal personality of partnerships is more muted, given the importance they hold of the person’s partner. There is in them a sharp separation between the assets and partners. For all these features, partnerships are closed societies.

Characteristics of Capitalist Societies

From the standpoint of patrimony, capitalist societies are characterized by:

  • No direct relationship between partners and social heritage. The assets are owned by the corporation, which uses them in traffic to achieve their ends.
  • No liability of partners for the debts.

From the organizational point of view, capitalist societies are characterized by:

  • The principle of hetero-organicism, i.e., members do not directly participate in the administration of society, but it has its own social bodies: the General Meeting (deliberative) and the board (responsible for management and administration).
  • The criterion of the majority to adopt social arrangements.
  • Social relations are not regulated by contract, but through laws governing the internal workings of society.

In the case of capitalist societies, the Company is established as a legal subject entirely separate from its partners. Any subjective amendments (death or departure of a partner) do not affect the normal functioning of society. All these characteristics make capitalist societies open societies.

Civil Society and Commercial Society

The partnership agreement governs both the Civil Code and the Commercial Code, generating this dual regulation. We need to point out the differences between civil and commercial societies. It is not a trivial problem because determining whether a company is civil or commercial involves, firstly, the submission of partnerships to civil or commercial law. And, secondly, that the legal subject is to be regarded as a businessman and apply or not the legal status of the employer.

Companies can be considered by:

  • Companies that have adopted some of the forms provided by the BCC or by special laws. The adoption of any of these forms requires members to register the company in the commercial register.
  • Companies not having registered in the commercial register a business exercise. Lack of registration may be because society is being formed (in which case it is called a society in formation), partners that have not wanted to register it (in which case it is called an irregular society), or access has been denied to the Register of Companies for failing to comply with its regulatory trade laws.

It is notable that the SA (Public Limited Company) and the SL (Limited Liability Company) are always corporations, whatever their purpose or activity. For their part, partnerships (general partnership and limited partnership) are commercial companies if their activity or object is commercial.

Company Contract or Corporate Structure

Contractual structure societies are characterized by determining what is the contractual level, i.e., the relations of partners to each other. These are civil society and personalistic business undertakings.

Corporate structure societies are characterized by what is relevant is its organizational aspect and not the contract, i.e., the organization born at the founding moment is endowed with full autonomy, completely separate from the partners and their vicissitudes. They are the SA, the SL, the limited partnership, cooperative, or mutual guarantee societies.