Business Structures: Key Elements and Legal Forms

Key Elements for Starting a Business

The key elements to creating a business are: an enterprising idea and a well-defined business plan.

Tip: Satisfy a need by addressing specific customer requirements. Differentiate your business through price, practicality, ease of use, technical advantages, psychological appeal, or social impact.

Types of Business Structures

Sole Proprietorship

A sole proprietorship is a business owned and run by one person where there is no legal distinction between the owner and the business. The individual, with legal capacity, acts on their own behalf or through representatives, engaging in commercial, industrial, or professional activities regularly. They are responsible for fulfilling all obligations with their assets, with no distinction between personal and business assets.

Constitution: Requires identification and voluntary registration in the Trade Register.

Collective Society

A collective society is a partnership where all partners agree to participate with the same rights and obligations in a commercial activity, as established in their agreement. It is a society with personal and unlimited liability. The company name will include the names or abbreviations of the members, followed by an appropriate expression.

Constitution: Requires a public deed and registration in the Trade Register.

Kommanditgesellschaft (Limited Partnership)

A Kommanditgesellschaft consists of general partners with unlimited liability and limited partners with limited liability. Limited partners commit to participating in an activity purely for commercial purposes.

Constitution: Requires a written agreement and registration in the Public Commercial Registry.

Limited Liability Company (LLC)

A limited liability company is a commercial entity whose capital is divided into equal, cumulative, and indivisible shares. These shares cannot be traded as negotiable stocks. The liability of the partners is limited to their contributed capital.

Constitution: Requires a written agreement and registration in the Public Commercial Registry.

New Limited Company

A New Limited Company is a specialized form of the Limited Liability Company, designed for easier and faster constitution. The minimum and maximum capital requirements are between 3012 and 120,202 (currency not specified).

Constitution: Requires a public deed and registration in the Trade Register.

Limited Company (Corporation)

A Limited Company is a corporation whose capital is divided into shares that can be freely transferred. Liability is limited to the assets of the company, not the personal assets of the members.

Constitution: Requires registration in the Public Registry and registration in the Register of Labor Companies.