Legal Entities: A Comprehensive Guide to Types and Structures
Legal Entities: Types and Structures
Legal persons are entities with the legal capacity to perform all the actions of an individual.
Physical Existence | Legal Existence |
Born, lives, dies | Is, acts, dissolved |
Civil Registry | Public Registry of Commerce (or other, depending on entity type) |
DNI (National Identity Document) | Social Contract or Statute |
Rights and obligations, with limitations based on age and entity type. |
Types of Legal Entities: Various kinds of legal persons, such as partnerships, corporations, foundations, and mutuals. They share common characteristics:
- Two or more individuals with common objectives contribute to the entity’s initial equity.
- They possess their own identity, independent of their members, owning all assets acquired.
- They have their own patrimony, formed by partner contributions, exclusively belonging to the entity.
- They have full capacity to conduct their chosen activity, acquire rights, and contract obligations.
Key Differences Between Associations and Companies
Associations | Companies | |
Object | Non-profit; common good or community partners. | For profit; all activities and operations aim to generate profit. |
Legal System | Legislated and regulated by the Civil Code. | Legislated by the Companies Act (or similar), according to the company type. |
Gain | Not distributed; assets are used for institutional improvement. | Distributed or capitalized in equity. |
New Partners | Generally free; few restrictions. | Often restricted; requires mutual trust among partners. |
Dissolution | Assets go to a similar entity or the state; never distributed. | Assets are distributed proportionally to contributions. |
Variations | Vary according to activity (clubs, libraries, etc.). | Vary as Mixed, State, Private, or Commercial Civil entities. |
Companies
Companies can be:
Private: Funded entirely by private capital.
State: Capital provided by the State (national, provincial, or municipal).
Mixed: Some capital from the state and some from individuals; special legal regime.
According to their legal system, companies are classified as:
Civil Societies: Governed by the Civil Code. Defined as “when two or more persons mutually agree, each contributing a benefit to obtain an appreciable value in money, to be divided among themselves, using what each has contributed.”
Corporations: Regulated by the Corporations Act. Defined as “when two or more people, in an organized manner, according to one of the types under this Act, agree to contribute to the production or exchange of goods or services, sharing benefits and bearing losses.”
Common Features: Minimum two partners; contributions required; profits distributed.
Differences Between Civil and Commercial Companies
Commercial | Civil |
Organized according to legally prescribed rates. | All of the same type. |
Law 19550. | Civil Code. |
50 partners maximum. | There is a maximum number of partners. |
Purpose involves production of goods for resale, exchange of goods, or provision of services. | Activities are not considered commercial acts. |
A commercial enterprise exists when two or more people, in an organized manner, agree to contribute to the production or exchange of goods or services, sharing benefits and bearing losses. Society is a legal…
The social contract must contain:
- Name, age, marital status, occupation, address, and ID number of partners
- Company name and address
- Precise description of its purpose
- Social capital and each partner’s contribution
- Duration
- Organization of administration, taxation, and partner meetings
- Rules for distributing earnings or losses
- Clauses defining rights and obligations between partners and third parties
- Clauses addressing operation, dissolution, and liquidation
The following scenarios are possible:
- Partners neither win nor lose anything.
- Equity contributions are returned with a prize or additional amount, regardless of profits. (Clarification needed)
- Ensuring partners’ capital gains potential.
- All profits belong to the surviving partner.
- Determining a price for one partner’s acquisition by another.
- In societies with illicit objects, members, administrators, and those acting as such are jointly and severally liable for liability and social harm caused.
- If a society engages in illicit activities, it will be dissolved and liquidated at a judge’s request (Article 18 clarification needed).
- Minor heirs must be limited liability partners.
- Member rights and obligations begin on the contract’s specified date.
- Articles 125 to 133
- Members have vicarious liability (right to exhaust company assets before personal assets), unlimited liability (assuming partnership debts with personal property), and solidarity (obligation of a partner to pay a debt; a single creditor can claim from any member).
- The company name should include “partnership” or its abbreviation, and “and company” if not all members are appointed. Violation of this article results in joint liability with the company for contracted obligations.
- Any partner can manage. If there are multiple partners and roles aren’t specified, all can perform administrative acts. Joint administration: If specified, no administrator can act individually.
- An administrator can be removed by majority decision. Dissatisfied members have the right to withdraw. A partner may resign at any time.
- Contract modifications require all partners’ agreement.
- A partner cannot engage in competitive actions. Doing so can lead to exclusion and forfeiture of benefits.
Limited Partnership
Composed of a general partner (unlimited liability) and a limited partner (limited liability).
Called a simple limited partnership and includes the general partner’s name.
The principal backer is integrated only with obligations to deliver.
Administration and representation are exercised by the general partner or a designated third party.
The limited partner cannot manage the company.
The limited partner may examine, inspect, monitor, verify, review, and advise.
The limited partner has a vote on financial statements and administrator appointments.
In case of bankruptcy, competition, death, disability, or disqualification of all general partners, the limited partner may take urgent business action.
The partnership is dissolved if not rectified or transformed within 3 months; if the limited partner does not comply with the laws, they are jointly and severally liable.