Capitalist Business Entities and Corporate Law

Capitalist Business Persons and Capitalist Companies

Case 2A focuses on capitalist business persons. A capitalist company is an entity mainly based on capital contribution. In these companies, what matters most is the capital invested, not the personal identity of the partners. Decisions are usually made by a majority of capital, and liability is typically limited.

Types of Capitalist Companies

Capitalist companies are regulated by the Corporate Enterprises Act. The three main types are:

• Joint Stock Company
• Limited Liability Company
• Limited Share Partnership

Joint Stock Company (Sociedad Anónima)

A Joint Stock Company is similar to a Sociedad Anónima. Its key characteristics include:

• Its partners are shareholders.
• The minimum capital required is €60,000.
• All partners are capitalist partners; all may receive profits and all may incur losses, but their liability is limited.
• Decisions are made by a majority of capital, meaning that the shareholder with more capital holds more voting power.

The key idea is that in a Joint Stock Company, all partners are shareholders and all have limited liability.

Limited Liability Company (Sociedad Limitada)

A Limited Liability Company is similar to a Sociedad Limitada. Its features include:

• Its partners are stakeholders or partners.
• According to the course slides, the minimum capital is €1.
• All partners may receive profits and have losses, but their liability is limited.
• Decisions are also made by a majority of capital.
• A special feature of this company is the restriction of transmission, meaning that stakes cannot be transferred as freely as shares in a Joint Stock Company.

Limited Share Partnership

A Limited Share Partnership is a capitalist company that contains personalist elements. It features two types of partners:

• General partners: These are personalist partners who follow the logic of a General Partnership and have unlimited liability.
• Shareholders: These are capitalist partners who hold the majority of capital and have limited liability.

The minimum capital for a Limited Share Partnership is €60,000. Decisions are made by a majority of capital for shareholders, while general partners also hold decision rights according to the rules of a General Partnership.

Key Corporate Concepts and Structures

Case 2A also includes other important corporate concepts:

• Single Member Company: This is a company with only one partner or shareholder. Even if there is only one member, the company still maintains a separate legal personality.
• Corporate Group: Formed by a parent company and its subsidiaries under common control. While they may act as a single economic unit, each company keeps its own distinct legal personality.

Understanding Shares, Stakes, and Contributions

The case also explains the distinction between shares and stakes:

• Shares are typical of Joint Stock Companies, whereas stakes are typical of Limited Liability Companies. Both can be voting or non-voting.
• Social Contributions: These are what partners contribute to the company. They can be cash contributions (money) or non-cash contributions (assets or rights with economic value, such as machinery, a patent, or a building).
• Ancillary Commitments: These are extra obligations of partners that do not form part of the capital, such as providing technical services to the company.