Commercial Enterprise Structure and Legal Framework

Commercial Enterprise Definition

A commercial enterprise (or trade company) comprises all persons and assets organized by the owner to perform a profitable activity, such as the production or exchange of goods or services for the market.

Characteristics of a Commercial Enterprise

• The set of assets and rights is ordered and systematized.
• It is subject to legal recognition and protection.
• The ownership and organization of these elements belong to the entrepreneur or merchant.

Legal Nature of the Enterprise

The enterprise or business negotiation is considered a universal fact. The owner's will dictates that they respond to the trade obligations using their civil estate (personal assets).

Distinguishing Business Negotiation and Entity

Commercial Negotiation (The Business): The set of assets and rights that constitute the enterprise. It lacks legal personality and is often referred to by its assets or trade name.

Business Entity (The Company): An entity possessing legal personality. It owns the commercial negotiation and operates under a legal name (corporate name or individual's name).

Criteria for Merchantability

An enterprise is considered commercial (merchantable) when it engages in acquisitions, disposals, leases, purchases, sales, insurance, financial operations, or acts as a bailee.

Legal assumptions for merchantability include:

• The purpose of profit inherent in the legal commitments.
• Its massive operation conducted by a company.

Essential Elements of the Commercial Enterprise

Personal Elements

• In an Individual Enterprise: The entrepreneur (owner).
• In a Social Enterprise (Partnership/Corporation): The administrator(s), director(s), or manager(s).

Material Elements

Tangible assets included in the employer's inventory, which are not necessarily owned by the employer.

Incorporeal Elements (Intangible Assets)

• Industrial Property Rights

  • Trademarks: Graphic manifestations used to distinguish the goods or services of an entrepreneur.
  • Patents: Legal protection for human creations that transform matter or energy of nature for human exploitation.
  • Trade Secrets: Confidential information of industrial or commercial application maintained in confidence by a person.
  • Business Slogans/Notices: Phrases or sentences used to advertise stores or businesses to the public.
  • Designation of Origin: The name of a geographic region used to designate a product originating exclusively therein.

• Copyright

  • Literary
  • Teaching
  • Artistic
  • Scientific
  • Audiovisual

The Enterprise in Modern Business Law

• Farmers and manufacturers who store or sell their products are considered traders.
• Traders must participate in the formal opening (registration) of the facility.

Individual Limited Liability Enterprise

This entity, previously known by various names, now enjoys legal personality and patrimonial autonomy.

Attributes, requirements, and design of these companies:

• Corporate Accountability

  • Damages caused by defective products.
  • Damages resulting from the use of solar energy.
  • Environmental damages.
  • Collective damages.
  • Psychological damages.

Various Classifications of Enterprises

• Classification by Ownership:
  • Private, public, and mixed.
• Classification by Activity:
  • Commercial, industrial, agricultural, and livestock.