Understanding Social Capital and Formation Procedures of S.A.
SOCIAL CAPITAL (S.A.)
By the very nature of S.A., social capital plays an important role. Social capital, divided into shares, the figure shown is written in the Bylaws and is the result of the sum of the value assigned in the Bylaws to members’ shares.
It is very important not to confuse the concepts of social capital and social heritage. At the founding moment, it is common that both concepts are equal, but as time passes, society may increase (or decrease) your estate. In short, social capital is an accounting figure that appears in the charter, while the assets can be defined as the set of rights and obligations of monetary value belonging to society.
Social capital has the following functions:
- Financial Function: Capital is a means of raising money or other property to be suitable for assessment of the social enterprise operation (financing company).
- The role of guarantor for third parties: As a result of the limitation of liability of the partners, third parties may only act upon the assets of the company.
- Civil organization of rights: The partner’s rights are organized according to the criterion of proportionality.
The legal management of social capital comes to ensuring adequate capitalization of S.A. and punishing cases of undercapitalization, guided by the following principles:
- Principle of minimum capital: Social capital can never be less than 10,000,000 pts. The minimum capital must be provided not only at the founding moment.
- Principle of determination: Capital must be determined in the statutes.
- Principle of integrity: In order to constitute the S.A. capital, it must be fully subscribed.
- Principle of minimum payout: The S.A. cannot be established if its capital is fully subscribed and paid in a quarter of the nominal value of each of the shares.
- Effective correspondence principle: The number of formal social capital must correspond to an effective contribution of assets.
- Principle stability: The amount of share capital stated in the bylaws may be altered only by following strict legal procedures through a statutory amendment. The performance of the company may not yield a result below the equity share capital figure.
GRANT OF THE PUBLIC DEED OF CONSTITUTION (S.A.)
The notarial deed is the document that contains the founding contract of society. Art. 8 of the LSA provides the minimum content that is:
- The identity of the partners.
- The willingness of grantors to establish an S.A. This indication ensures that the founders are fully aware of the social type chosen and the consequent implementation of its legal system.
- The contribution of partners and shares awarded in payment.
- The total amount of the costs of formation.
- The identity of the persons initially responsible for the management and representation of society.
- The identity, if any, of the auditors.
- The rules governing the functioning of society.
The statutes are the contractual rules of organization of society whose contents can be changed by majority vote. In addition to those needed, they should also include all covenants and conditions as members see fit, as long as they do not contradict the laws or contravene the principles of S.A. configurators.
FOUNDATION PROCEDURES
There are two ways of founding an S.A.:
- Simultaneous Foundation: The foundation comes in one act by agreement between the founders as expressed in the charter of incorporation. Founders shall grant all persons the public deed and sign all actions.
- Successive Foundation: This procedure, which by its complexity, is rarely used in practice when applied prior to the deed of incorporation, has a promotion place public for subscription of shares by any means of advertising or the performance of financial intermediaries.
SOCIETY IN TRAINING
The rule provides that the acts and contracts concluded on behalf of the company before its registration are jointly liable, except for those who have concluded that their effectiveness has been subject to the effective registration of the society. This responsibility shall cease when, once the society is registered, it takes such acts and contracts within three months from registration.
This general rule has exceptions in 3 cases in which the company will respond in formation with the heritage formed by contributions from the partners. The exceptions are:
- Instruments necessary for registration of the company.
- Acts made by administrators within the powers assigned to them by writing for the stage prior to registration.
- The stipulated under specific mandate by the people for this purpose designated by all partners.