Requirements for Commercial Company Formation and Legal Personality
Irregular Societies and the Path to Legal Personality
The central issue addressed in these articles is the problem of the irregular society—a company that has not been established in compliance with all applicable legal requirements.
The establishment of a regular legal person follows a defined process:
- The Partnership Agreement regulates internal relationships among partners.
- A Deed and Registration process is required.
- Registration leads to the creation of a Legal Person.
The Legal Person is essential for regulating external relationships with third parties, acquiring rights, and incurring debt. These relationships occur as a result of the society's actions within the economic framework.
It is crucial to understand that relationships occurring within the society are governed by the partnership agreement, but the partnership agreement cannot regulate external relations.
Determining Commercial Company Status
To identify whether a company is commercial or not, the rules established in the Commercial Code must be applied. A company will be deemed commercial upon the establishment of rules delimiting its scope, as defined by Article 116 of the Commercial Code.
The partnership agreement often involves a dual regulation (Civil Code and Commercial Code), which serves as a criterion to determine whether the entity is civil or commercial. This approach often redirects the focus to the specific activity the entity intends to pursue. However, the chosen legal form (for example, a Public Limited Company, or SA) may determine the entity to be commercial, even if the underlying activity might otherwise be considered civil.
Company Law and the Social Entrepreneur
Company Law is defined as the set of rules governing the social entrepreneur.
Defining a Commercial Company (Article 116 C. Trade)
Article 116 of the Commercial Code states:
The companies contract is one by which two or more persons are obliged to put into mutual fund assets, industry or any of these things for profit, will be commercial, whatever their class, provided that it is constituted under the provisions of this Code. Once established the trading company, shall have legal personality in all its acts and contracts.
A society is fundamentally a contract concluded between two or more people. The aim is that these people are bound to contribute to a common pool (goods, industries, or other things) for the purpose of profit (lucro).
Required Contributions to the Mutual Fund
When discussing contributions, we refer to:
- Assets: Real property of any nature and rights, including patents, trademarks, and intellectual property rights.
- Industry (Work): Providing labor or specialized work.
Requirements for Legal Personality
For a legal person to be formally established and recognized (as per Articles 117, 118, 119, and 120 of the Commercial Code), two essential requirements must be met:
- The contract must be formalized and raised to a public deed.
- The company must be registered in the Commercial Register.
Failure to meet these two requirements results in the administrators being jointly and severally liable for the company's actions.