Legal constitution of companies

21 January 2009 - 19:07

When creating a company or business, is necessary we constitute that it legally, it will allow us that our company legally is recognized, that is subject on credits, that we pruned to emit supporting of payment, and which we pruned to produce, to commercialize and to promote our products or services with authority and without restrictions.

At the time of setting up our company legally, an important decision is the one to choose one of the different types from company or society that exist and that we are going to use.

But before it we must determine if the company will be set up like Natural Person or Legal Person.

We see next the definition of each of these functions and position of agent, as well as the advantages and disadvantages that present/display:

Natural person

Natural person is a human person who exerts rights and fulfills obligations in a personal view.

To create a company or business like Natural Person, means that we (who we happened to be the Natural Person), like creators and owners of the company, assumed all the rights and all the obligations of this one.

To assume all the obligations means that we assumed all responsibility and we guaranteed yet patrimony that we own (all the goods that is to our name), the obligations that can contract the company.

For example, if the company bankruptcy and is forced to pay some contracted debt, we will be we, in a personal view, who we will be forced to respond before this debt and, in case of not doing it, our personal goods could be obstructed.

This one (having “limitless responsibility”) is the main characteristic and greater disadvantage to create a company or business like Natural Person.

We see next other advantages and disadvantages:

Advantages

• they are created easily: majors are not demanded proceedings or requirements.
• it is not demanded to document and to present/display so many countable to them.
• they are eliminated easily.
• the property, the control and the administration fall to a single person.
• the patrimony of the company without no restriction can be extended or be reduced.

Disadvantages

• all the responsibility and the debts assumes the owner (the Natural Person), yet the patrimony that it owns.
• limited availability of capital: because the capital is contributed only by the owner.
• the lack of continuity in case of incapacity of the owner.

Legal person

Legal person is a company or business that exerts rights and obligations to its name.

To create a company or business like Legal Person, means that it is the company, and not we, who acquire and assume the rights and the obligations.

Unlike the Natural Person, the obligations assume the company, which are limited and are guaranteed only with the goods that the company can have to its name (as much capital as patrimony).

This one (having “limited responsibility”) is the main characteristic and greater advantage to create a company like Legal Person.

We see next other advantages and disadvantages:

Advantages

• all the responsibility assumes the company, therefore, the owner or the owners does not assume the personal obligations with their patrimonies or goods (what yes he happens in the Natural Person).
• greater availability of capital: because the capital I could be contributed by several partners.
• possibility of securing a greater financing.

Disadvantages

• majors proceedings and requirements at the time of constituting them.
• it is demanded to document and to present/display more countable to them.
• majors proceedings and requirements at the time of eliminating the company.
• the property, the control and the administration can fall to several people (partners).
• majors restrictions at the time of wanting to extend or to reduce the patrimony of the company.

Labels: Creation of businesses

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