Commercial Companies (definition and characteristics)

The word society It is used with different meanings, as a contract and as a legal entity. As a contract, it refers to the agreement that is concluded between the partners and as a legal entity it refers to the grouping that arises from said contract, understood as the legal person different from the person of the members that the integrate.

For the creation of any society, it is necessary to give rise to the union between people who have decided to join in order to conduct business and obtain certain goals and benefits economic.

Some trading companies They have a single purpose, which when achieved automatically, the company is dissolved, others are established for various purposes and their duration is indeterminate.

Mercantile Societies They are regulated by the Commercial Code and are characterized by pursuing an economic purpose with the execution of commercial or commercial activities.

What is a commercial company?

It is a legal person whose purpose is to carry out commercial activities subject to commercial law. It has a nominal character where there is an obligation and the application of a contribution to obtain an economic purpose.

These mercantile companies originate through a contract, when 2 or more people are obliged to make certain contributions to build the capital stock of a company, transformed into the goods that will allow to carry out a commercial activity and in turn these partners have part in the gains and losses suffered said company.

Rigorousness of mercantile companies

It is also important to know that a commercial company can modify its structure as many times as necessary, that is, it can be divided, merge with another, change partners, change business activity, incorporate new members, change the statutes established in the document constitutive. With the particularity that each and every one of the changes applied must be registered in the Registry where it was incorporated.

In the same way, this type of company can be dissolved, when its partners decide to end the activity, that is, to terminate the company for reasons clearly established in the law or in the statutes, immediately after this, the liquidation must be made transforming into money all the assets of the company, in order to cancel the liabilities and distribute the remainder among the partners according to the number of their Actions.

It should be noted that each country has legal regulations that regulate the different mercantile companies, such as in Mexico the General Law of Mercantile Companies, in Argentina the Law of Commercial Companies, in Spain the Law of Capital Companies, in Uruguay the Law 16 060 of Companies Commercial, etc.

Characteristics of commercial companies

They are characterized by acting on their own account with a name or denomination under a domicile, with their own capacity and assets. The constitution must be carried out by means of a deed that contains all the aspects established in the law and then will be recorded in the corresponding Registry.

Some of the characteristics given at the time of incorporation of the company are:

• Legal capacity: It is the holder of rights and obligations conditioned by the purpose of the company, that is, its rights and obligations are contained within its corporate purpose.
• Type of Assets: The company is the owner of a set of assets, rights and obligations and can be classified as active assets, consisting of assets and rights. And passive patrimony constituted by the obligations and debts of the same.
• Name: It is nothing more than the name or company name and is defined as the set of characters that identify the company individually and distinguish it from the others.
• Address: It is the place constituted as the main business headquarters, being able to have one or more addresses, as long as all this is included in the articles of incorporation. The main domicile is known as the parent company and the adjuncts as branches, and one or the other can be used interchangeably for legal purposes.
• Nationality: The nationality of all commercial companies will be as constituted according to the laws of their country of origin and that they establish their domicile there.

Elements of Commercial Companies

Three fundamental elements intervene in this type of company:

• Personal element: Made up of partners, people who contribute and pool their efforts.
• Patrimonial element: Made up of the set of total assets contributed by each and every one of the partners, to form the capital stock, assets and work.
• Formal element: Set of rules relating to the solemnity of the contract that begins society as an individual by law.

Classification of Commercial Companies

They can classify according to several criteria, among them the following stand out:

According to how the elements predominate:

• Societies of People: These are those societies in which the personal element predominates. Includes partnerships and simple limited partnerships.
• Intermediate companies: They are those where the predominant element is not clear. It includes the limited liability company and the limited liability company by shares.
• Capital companies: They are those where the social capital predominates. Includes cooperatives and corporations.

According to the type of capital:

• Fixed Capital: Are those where the capital stock cannot be modified, unless it is done by a modification of the bylaws.
• Variable Capital: These are those companies where the capital stock decreases and increases as the company progresses, without special or complex procedures.

Legal classification:

• Collective society.
• Simple Limited Partnership.
• Limited Liability Company.
• Anonymous society.
• Limited Partnership by Shares
• Cooperative Society.

Other types of trading company

In the same way, the following are observed:

• de facto commercial companies: They are those that were not documented in public or private writing.
• Irregular mercantile company: These are those that were documented in writing, but lack any of the legal requirements, such as: they were not registered, the articles of incorporation were not published, their term expired, etc.

Constitution of Commercial Companies

It is the act that is carried out before legal instances and by means of which the mercantile society reaches legal personality, so it must comply with applicable requirements and legal protocols of rigor. Incorporated companies that lack these requirements are known as Irregular Companies.