Understanding Company Structures: Legal Persons, Meetings, and More
When are Companies Considered Legal Persons?
The Commercial Code states that an employer can be a:
- Sole Proprietorship (Individual)
- Social Enterprise (Legal Person)
For a corporation to be considered a legal person, the following is necessary:
- It must be established through a public written document.
- This document must be registered in the Mercantile Registry.
If these requirements are met, the corporation has legal personality, which means:
- Having rights, such as being a holder of bonds.
- Engaging in legal processes.
Classes of General Meetings in a Public Limited Company (SA)
Classes of Meetings
The law governing corporations allows for two classes of general meetings: ordinary and extraordinary.
Ordinary Meeting
This meeting must be held within 6 months of the company’s year-end to review and approve the annual accounts, financial management, and implementation of the outcome. If held later, it is not considered extraordinary. The defining characteristic of an ordinary meeting is the timing, not the issues discussed. If held later, it remains regular, but any resulting damage to the company becomes the responsibility of the auditors or administrators.
Extraordinary Meeting
Any general meeting of shareholders that does not address the issues of the ordinary general meeting.
Convening a General Meeting
When a general meeting is called, it must be clearly stated that it is convened. The law allows for the possibility of holding a meeting without prior notice if certain requirements are met. This is known as a universal meeting, not to be confused with a third-class meeting. There are only two classes of meetings.
When is the Due Date?
- Fixed Date: Due on the prescribed date.
- Period from the Date: Due on the day indicated by the deadline from the date of the warrant.
- Period from Acceptance: Due on the day indicated by the deadline from the day of acceptance by the drawee, or from the day of protest or equivalent statement if not accepted.
- At Sight: Due at the time of presentation for payment, to be made within the year following the date of drawing, unless the drawer sets a longer period or shortens it.
Types of Protest in a Bill of Exchange
- Lack of acceptance
- Partial acceptance
- Full payment
- Non-payment
- Bankruptcy
Term of Directors in a Public Limited Company (SA) and Limited Liability Company (SRL)
The term of office for an administrator of a corporation is determined by the statutes but cannot exceed six years, as stated in Art. 126 LSA, and must be the same for all managers.
Companies: Constitution and Classification
Partnerships
Regulated by the Commercial Code, a partnership involves two or more persons conducting a commercial activity. Partners have unlimited liability and are subsidiarily liable for the company’s debts. The company name can include the names of the partners. Partners contribute to the company, and their participation is determined by their contribution, which can be money, machinery, or real estate. A partner can also contribute their work and is called an industrial partner.
The Commercial Code states that partners must not perform work in other businesses of the same type.
Limited Partnerships
Established through a written document and registered in the Commercial Register. Partners can be general partners with unlimited liability or limited partners with liability limited to their contribution. Limited partners cannot be administrators and have restricted access to information. Only general partners are included in the company name.
A limited partnership can be transformed into a Public Limited Company (SA). The reasons for dissolution are the same as for a partnership. Dissolution can occur due to bankruptcy, the death of a general partner (unless otherwise agreed upon), or if the objective has been achieved.
Capitalist Societies: Limited Liability Company (S.L.)
Regulated by the Commercial Code and the Law of Corporations. The minimum share capital is the same as for a Public Limited Company (SA) (60,101 euros). It is constituted by public deed and approval of bylaws. All members are shareholders and have limited liability. A member can be an administrator, and in that case, they have unlimited liability regarding debts contracted during their tenure. This liability ceases when they leave the managerial position.
The social bodies of a limited liability company are the General Board and the Administrators. The General Board is governed by the law of limited liability companies regarding its constitution and operation.