Understanding Corporations: Structure, Capital, and Governance
Understanding Corporations: Structure, Capital, and Governance
Concept
A corporation is composed entirely of partners whose liability is limited to the payment of their shares. Its two key elements are the minimum capital in the amount of 50,000 pesos and the existence of at least two partners.
Background
Corporations arose in the Netherlands (Holland) in the late sixteenth century as a result of numerous Dutch commercial exploration trips.
Single Member Company
In all corporations, there is a strong interest, mainly in the regulation of the corporation, for the obvious reason, among others, of the growing importance of the same in all spheres of economic and even social and political life.
Trading Company Capitalist (Share Capital)
It is configured by the sum of the liabilities to the partners. What happens in the course of social life is in reality a mere figure. Cash and property contributed by the members pass up their assets in union with the other revenue received by the society and therefore affect the losses to be reported, so that heritage in fateful times may become less than social capital.
Action as a Representative of Social Capital
The shares into which the capital stock of a corporation shall be represented by registered certificates that will serve to establish and convey the quality and shareholder rights, and shall be governed by the provisions relating to literal values, as is consistent with their nature and not modified by this law.
Ban on Corporations Acquiring Their Own Shares
Corporations are prohibited from acquiring their own shares, except by judicial adjudication, in payment of credit to the society.
Capital Increases and Reductions
- Any corporation may be formed with a fixed capital or with variable capital.
- In the first case, increases or reductions must be agreed upon by an extraordinary general meeting, as it involves an amendment to the bylaws.
Bodies of the Corporation
The three corporate bodies fit for all kinds of social functioning:
- The supreme organ or general assembly.
- The board of directors.
- The EFTA Surveillance.
Bodies
- Supreme Body: Agrees and ratifies all acts and transactions of this and its resolutions will be enforced by the person designated by itself or in the absence of designation by the administrator or the board of directors.
- Representative Body: Has the legal representation of the corporation, and so it is nonsense to consider that its members are leaders.
- Body Control: According to the anthropomorphic conception of society, the characters who act as if they were under their eyes, the commissioner or commissioners, who in this second case will be the supervisory board.
Assemblies
- Constituent Assembly: This is simply an expression of multilateral wills made before the notary public, as a result of which arise the social clauses, with all its consequences.
- Regular Meeting: The regular Assembly may meet at any time to discuss matters of their competence but when they try to gather all the shareholders entitled to vote, to let them know the situation of the company during the previous year.
- Extraordinary Assemblies: Are reserved for special meetings on matters of major importance in the life of society, but not by much that their importance is related to the normal operation of the same.
- Joint Assembly: The doctrine attaches the label of the convened joint meetings to deal with matters within the ordinary and extraordinary. It is, in fact, a single assembly, for the issues to be addressed are the ordinary and extraordinary, therefore, there will be issues in both categories.
- Special Meetings: These meetings involve only the collection of a class of shareholders, i.e. the holders of a series of shares with special rights.
Participation
- Participation of Profits: In the most important economic rights is the partner’s participation in the profits of the society, which, once enacted by the ordinary general meeting (article 181-I), assumes the character of the dividends.
- Participation in the Settlement: This tells us that when the society is dissolved, the liquidators will have among its functions, to give each partner their part of the social assets.
Comparative Study Between the Corporation and Anglo Corporate Law
Between commercial companies and the anonymous Anglo Mexican. It is well known that substantial differences between Anglo-American law and written law or civil law, is that the latter relies on the existence of written laws, for many centuries in the regulation supported by Justinian, and later influenced by the Napoleonic codes, whereas common law countries give a secondary role to the few written laws.