Understanding Legal and Business Structures
Legal Name
In a broad sense, a legal name includes given names and surnames. It is the set of words that legally and officially identifies and designates each person. Strictly speaking, the proper name distinguishes one person from other children of the same parents. This name is given at birth and registered upon birth registration. The choice of name is left to the parents or legal guardians, provided it doesn’t hinder identification, such as names that are gender-neutral. In such cases, further clarification is required. For example, the name “Blue” must be accompanied by a gender-specific name. Name changes are possible under exceptional circumstances, requiring a valid reason and ensuring no harm to others.
Address (Domicile)
While often used synonymously with “home,” the legal definition of domicile refers to the place considered by law to be a person’s residence, which may differ from their actual dwelling. Every person must have a domicile within a jurisdiction for legal purposes, establishing a point of reference for rights and obligations. Domicile determines where legal proceedings, debt claims, and other legal actions are served. In essence, domicile is the person’s legal seat. Typically, domicile is the place of habitual residence. For married couples, the family domicile should be mutually agreed upon, with the court deciding in case of disagreement. Cohabitation is a spousal duty, and the law presumes couples live together unless proven otherwise. For minors and those under legal guardianship, the domicile is that of the parent or guardian. A person can have a domicile different from their residence for specific activities. This “elected domicile” is valid only for those designated acts, such as receiving notifications at a post office box or a bank for payment purposes. The law may also designate domicile for specific purposes, such as for public officials or traders at their business operations center.
Civil and Commercial Companies
A civil or commercial company is a contract where two or more persons contribute goods or services to achieve profit, which is then divided as agreed. A civil society undertakes civil acts, while a commercial society performs commercial acts.
Types of Companies
Partnership
Formed by two or more persons jointly and severally liable, operating under a common firm name. Advantages include minimal formalities for establishment. However, it carries increased risk for members due to unlimited liability and greater social control.
Limited Partnership
Consists of one or more general partners with joint and unlimited liability, and one or more limited partners liable only up to their contributed capital. General partners manage the company, while limited partners have limited liability.
Limited Liability Company (LLC)
Capital is divided into social partitions. Partners are not personally liable for debts. The name must include “Limited Liability Company” or its abbreviation. Minimum share capital is lower than corporations. Shares are represented by certificates or book entries. Formation requires a public deed registered in the commercial register, establishing legal personality. The deed specifies partner identities, contributions, shares, statutes, management, and administrators. Statutes must include the company name, object, address, social capital, and administrative organization.
Company (Corporation)
An association of capital for business. Capital is divided into shares, and shareholders are not personally liable for debts. The name must include “Sociedad Anónima” or its abbreviation. Minimum capital is required, and it always has commercial character. Incorporation requires a public deed registered in the commercial register. Capital must be fully subscribed, with at least one-quarter paid.
Corporate Structure
- General Meeting: Shareholders decide on matters within their competence. Meetings can be ordinary or extraordinary, convened by the directors.
- Administrators (Board of Directors): Appointed by the general meeting, they are not required to be shareholders. They have unlimited liability for company actions.