Understanding Modern Business Classifications and Partnerships
Modern Business Classifications
Economic Criterion
Supplement to individual work capacity (collective). Increasing company capital (limited partnership). Risk reduction through division (corporation).
Criterion of Unstated Goals
International societies that do not manifest outwardly, with the manager holding personal responsibility.
Economic and Legal Criteria
Response to social management or the relationship between business management and social quality. Individualistic, collectivist, or capital-based societies.
Legal Criterion
How creditors are paid varies by company type.
The Company of People: Commercial Partnerships
Definition
Article 2, Clause 2061 of the Civil Code defines a partnership as one where all partners manage themselves or through a mutually chosen representative, and are indefinitely and severally liable for the society’s obligations.
Formal Features of a Commercial Partnership
Constitution
Formed and documented by a public deed registered in the Commercial Register. The public deed containing the partnership agreement is called the “status” or “social pact” (Article 352).
Essential Social Status
- Names and addresses of the partners.
- Capital contributed by each partner.
- Business activities of the society.
- Address of the society.
- Corporate name or signature.
Non-Essential Social Status
- Partners responsible for administration and use of the name.
- Profit/loss sharing for each partner.
- Start and end dates of the society.
- Amount each member can withdraw annually for private expenses.
- Procedure for checking clearance and division of community assets.
- Arbitration clause.
- Other agreements made by the partners (e.g., balance periods, effects of a partner’s death).
Advertising Requirements
Registration in the Commercial Register and an extract of the public deed containing the social covenant. The extract must contain essential and some non-essential information (partner names, company name, administrators, social capital). Registration must occur within 60 days of the grant date. Failure to comply results in absolute nullity between partners.
Exercise of Action and Nullity of Right
Absolute nullity action can be exercised by members. Nullity of right occurs if the society lacks a public deed or docketed instrument, making it void and requiring no judicial declaration.
Operation of the Partnership
Management
Managed by all partners, delegated to one or more partners, or delegated to external parties.
Supplemental Legal Aspects of Management
- Administration right belongs to all partners.
- Legal mandate grants reciprocal management rights in the absence of a designated administrator.
- Each partner can validate acts and contracts within the ordinary course of business.
- Right to object to acts planned by another member.
Delegated Administration
Management entrusted to specific administrators and social leaders under contract stipulation.
- Social administrators can be all partners jointly, one or more partners jointly or separately, or external parties jointly or separately.
- Social leaders are appointed by administrators to perform specific acts under general or special mandate (revocable).
The Name and Firm Name
The Name
Identifies the legal entity and enables legal relationships with third parties.
The Firm Name
Formula including the names of all or some partners, with the addition of “and company.”
Features of the Firm Name
- Truth: Must be accurate and reflect the current partners.
- Essentiality: Essential for identification and legal relations.
- Non-Assignability: Cannot be transferred.
- Exclusive: Reserved for the specific society.
- Durability: Remains unchanged unless partner composition changes.
Use of the Name
Only company directors can use the name. Authority to manage implies the right to use the corporate signature.
Consequences of the Name
The society is bound by actions taken by administrators in its name. Creditors must first address the society for payment before pursuing partners.
Dissolution and Liquidation
of the partnership
The dissolution of the company may be legal, statutory, voluntary or judicial.
The partnership is dissolved by:
1 The closing date for the event or condition has been fixed for its termination. 2 ° The completion of the business for which it was incurred. 3 ° The partnership is dissolved by insolvency. 4th from extinction of the thing or things that make up your total order. 5 ° If any of the partners fails by his act or fault of his promise to put things together or the industry has been obliged by the contract, the other will be entitled to to society by dissolved. 6 ° If a member has made the ownership of a thing, but society remains this thing to perish, unless it can continue without it useful. 7 ° By the death of any of the partners, except when by provision of the law or the deed to be continued among the surviving partners to the heirs of the deceased or not. 8th also marks the company by the supervening incapacity or insolvency of a partner. 9 ° The company may expire at any time by unanimous consent of partners. 10 ° Society may also expire by the resignation of a partner. 11 ° The partnership is dissolved for serious reasons.