Legal Entities in Chile: Definition, Attributes, and Types

Understanding Legal Persons

Legal persons are collective entities distinct from the individual personalities of their members. The Civil Code defines them as entities capable of acquiring civil rights and obligations, and of being represented in judicial or extrajudicial matters.

Key Attributes of a Legal Person

1. Name or Business Name: This is specified in the foundational contract or articles of incorporation.
2. Domicile: The official address of the entity.
3. Nationality: For entities established in Chile, this typically means having Chilean nationality.
4. Civil Capacity: The ability to enter into acts and contracts. Legal persons are not criminally liable and cannot marry.
5. Assets (Patrimony): The collective property and financial resources of the entity.

Types of Legal Persons

1. Public Law Legal Persons

These entities are established to meet collective public needs. Examples include municipalities (mayors' offices), ministries, and public health services. They are created by law, and their will is expressed through the supreme head of the institution. Public law legal persons possess public legal personality and their own distinct patrimony (assets).

2. Private Law Legal Persons

These entities also meet specific needs and are classified into two main categories:

a) Non-Profit Entities

These include corporations and foundations.

Corporations (Non-Profit)

• Formed by a public deed executed before a notary and signed by the founders.
• Their initial capital and decisions are expressed through assemblies.
• Examples: Red Cross, neighborhood councils, trade unions.

Foundations

• Created by a will or deed where a person dedicates all or part of their property for a specific purpose.
• Their will is expressed through the founder's declarations in the testamentary act or deed.
• Examples: Telethon, Pablo Neruda Foundation, Future Foundation.

b) For-Profit Entities (Companies)

These are companies, formed by a contract where two or more people agree to contribute something to share the profits generated from its operation. Several types of companies exist:

• Unlimited Liability Companies: Partners are fully liable for the company's debts.
• Limited Liability Companies: Partners' liability is limited to the amount of their contribution.
• Limited Partnerships (Sociedad en Comandita): Characterized by having both managing partners (with unlimited liability) and limited partners (with liability limited to their contribution).
• Stock Corporations (Sociedades Anónimas):
  • Open Corporations: Can trade shares freely on the stock exchange.
  • Closed Corporations: Cannot trade shares freely on the stock exchange. Examples include entities like fishermen's cooperatives, bus drivers' associations, or indigenous communities marketing their products.

All companies are established by a public deed, an extract of which is published in the official gazette and subsequently registered in the commercial registry for their domicile.