Legal Forms of Business Entities: Structure and Liability

The Role of Partner Personality in Business Entities

The personality of the partners is a crucial characteristic, as their direct involvement in management corresponds to their liability, making them key to the capital structure of the entity.

Collective Company Characteristics

A Collective Company is characterized by the following features:

• The minimum number of members required is two.
• All partners intervene in the management of the company, although partners may also provide only employment without intervening in management.
• The partners respond personally for debts incurred with third parties, often involving joint and several liability.
• There is no minimum capital required for establishment.
• This company is taxed by Corporation Tax.

Understanding the Limited Partnership

A Limited Partnership is a type of personalist company, although it involves two distinct types of partners:

General Partners vs. Limited Partners

• General Partners (Colectivos): These partners intervene directly in the management of the society and respond personally for the debts incurred.
• Limited Partners (Comanditarios): These partners perform only an economic contribution and participate solely in economic performance without interfering in the management of the company.

Limited Partnership Features

• The minimum number of members must be two.
• The condition of a partner cannot be transmitted freely without the consent of the other partners.
• There is no minimum share capital required for its constitution.
• The business name is formed by the name of all general partners or any of them, followed by "and Company."

Social Interest Society Definition

A Social Interest Society is a type of company that does not seek profit, but rather aims to satisfy the common needs of its members.

The Cooperative Business Model

A Cooperative is an association of natural persons and legal entities with common interests that develop a particular business activity.

Cooperative Features and Grades

• The cooperative may be of First Grade, where the minimum number of members is five.
• The cooperative may be of Second Grade, integrated by cooperatives that are usually legal entities.
• The liability of members is limited to the amount of their contributions.
• The minimum capital is variable and is set in the statutes, according to the number of partners.
• No partner may hold more than 25% of the capital if the cooperative is First Grade, or more than 45% if it is Second Grade.

Constitution and Registration

A cooperative must fulfill the following requirements for constitution:

1. Drafting of the statutes and constitution writing.
2. Inscripción (Registration) in the General Registry of Cooperatives.

Cooperative Governing Bodies

There are four main governing bodies:

• General Assemblies
• Board of Regents
• Resources Committee
• Inventors (or Auditors/Interventors)

Types of Membership and Rights

Membership types include:

1. Cooperative Partners: Those who must provide the minimum amount set in the statutes.
2. Employees: Individuals hired by the cooperative.
3. Adherents: Those who inject capital into the cooperative.

Partners are entitled to:

• Participate in the cooperative's activities.
• Honor agreements.
• Participate in training activities.

Cooperative work can be focused on consumers, insurance, education, credit, etc.