Civil society and civil association

Societies in general.

Societies are independent economic entities that pursue particular economic ends. They are subjects of rights and obligations, and therefore, they have a different legal personality than their partners.

The companies exercise their rights and contract obligations through their representatives.

For commercial companies to have legal personality different from that of their partners, they must be registered in the Public Registry of Commerce. If they are not registered they are called irregular and in this case their representatives and agents who carry out legal acts will be responsible for compliance with The same against third parties, subsidiary, jointly and severally and unlimitedly.

The civil society contract must appear in a public deed and be registered in the Civil Society Registry in order to produce effects against third parties.

In civil partnerships, the partners who manage them guarantee the fulfillment of social obligations in a subsidiary, joint and several way and without limits. The other partners, unless otherwise agreed, are only obliged to pay their contributions.

Object.

Companies must have a formal object to determine their commercial nature.

If the acts that the company pursues are commercial, the company will be commercial, otherwise it will be civil.

The Civil Code states in article 2688: "A common purpose of a predominantly economic nature, but which does not constitute commercial speculation."

Companies that have a lawful object or habitually exercise illegal acts will be void and liquidation will be carried out at the request of any person. After the company's debts have been paid, the remainder will be applied:

In commercial companies, "to the payment of civil liability, and in the absence of this, to the public benefit of the locality in which the company has its domicile." (Article 3)

In civil partnerships, the partners “will be reimbursed what they have brought to the partnership. The profits will be destined to the public welfare establishments of the place of the domicile of the company ”. (Art.2692).

Heritage.

The assets that belong to the companies are part of their patrimony, which constitutes the guarantee of the creditors with whom they are obligated.

The patrimony is integrated with the contributions of the partners, which can be in money or assets, and by the results obtained in their operation, which are integrated into different rights, assets and obligations that constitute the financial structure of the entity.

All this belongs exclusively to the company as an attribute of its legal personality and under no circumstances would it be acceptable to use it to comply with the personal obligations of the partners.

When the company is dissolved or liquidated after fulfilling all the commitments in charge of the company, the surplus of the patrimony must be distributed among its partners.

Denomination.

Companies require a name or company name with which they make themselves known and designate themselves in their different acts that they celebrate. If the company name only mentions the name of a partner, the words "And Company" must always be added.

Regulations of the companies.

The General Law of Commercial Companies regulates companies of a commercial nature. Civil companies are regulated by the Civil Code through its title Tenth

The Civil Society.

Civil companies are regulated by the Civil Code through its title Eleventh

It has the following peculiarities:

Concept:

Article 2688, Civil Code:

"By the partnership contract the partners mutually oblige each other to combine their resources or their efforts to achieve a common goal, predominantly economic in nature, but that does not constitute commercial speculation."

To proceed with the Constitution of a Civil Society:

That there are at least two partners. That the corporate purpose is lawful. That the contribution of the partners in money, labor or goods that implies the transfer of their domain to the company is exhibited, unless otherwise agreed. Contract in writing and registered in the Civil Society Registry.

The social reason:

Article 2699, Civil Code:

"After the company name, these words will be added: Civil Society."

The obligations of Civil Society:

Article 2704, Civil Code:

"The social obligations will be guaranteed subsidiarily by the unlimited and joint liability of the partners they manage; the other partners, unless otherwise agreed, will only be bound by their contribution ”.

Subsidiary responsibility:

It means that to demand responsibility from the partners individually, it must have been demanded before the legal person, that is, first the assets of the company must have been liquidated and later the private assets of the companies must be executed for the payment of obligations. partners.

Unlimited liability:

It means that the partners are liable with all their personal assets for the payment of debts and the fulfillment of social obligations.

Joint responsibility:

It means that the creditors of the company may require any of the partners to fulfill the obligations of the company, being individually liable.

Types of contributions:

Article 2689, Civil Code:

“The contribution of the partners can consist of an amount of money or other goods, or in their industry. The contribution of goods implies the transfer of its domain to society, unless otherwise expressly agreed ”.

Article 2697, Civil Code:

"It cannot be stipulated that the capitalist partners are given back their contribution with an additional amount, whether or not there are profits."

Article 2703, Civil Code:

“Unless it has been agreed in the partnership agreement, the partners cannot be obliged to make a new contribution to expand the social businesses. When the increase of the capital stock is agreed by the majority, the partners who are not satisfied can separate from the company ”.

Civil Society Contract:

Article 2690, Civil Code:

“The partnership contract must be in writing; but it will be recorded in a public deed, when a partner transfers to the company assets whose transfer must be made in a public deed ".

In the event that there is no civil society contract, the following article is followed:

Article 2691, Civil Code:

"The lack of a prescribed form for the partnership contract, only produces the effect that the partners may request, at any time, that the liquidation of the partnership be made in accordance with what was agreed upon, and in the absence of an agreement, pursuant to Chapter V of this section; but as long as that liquidation is not requested, the contract produces all its effects between the partners and they cannot oppose third parties who have contracted with the company, the lack of form ".

Types of Partners:

There are two types of partners:

capitalist partners and industrial partners.

The capitalist partners will be those who contribute their capital.

The industrial partners will be those who contribute their work.

Transfer of your rights

Article 2705, Civil Code:

“The partners cannot assign their rights without the prior and unanimous consent of the other partners; and without it, other new partners cannot be admitted, unless otherwise agreed, in both cases ”.

Right of both or of preference:

Article 2706, Civil Code:

“The partners will enjoy the right of both. If several partners want to make use of both, it will be their responsibility in the proportion they represent. The term to make use of the right of both, will be eight days, counted from receiving notice of the one who intends to sell.

Exclusion of partners.

Article 2707, Civil Code:

"No partner can be excluded from the company except by the unanimous agreement of the other partners and for a serious cause provided for in the statutes".

Article 2708, Civil Code:

"The excluded partner is responsible for the part of the losses that corresponds to him, and the other partners can retain the part of the capital and profits of that one, until the pending operations at the time of the declaration are concluded, and the corresponding liquidation must be made until then".

Article 2702, Civil Code:

“Each partner will be obliged to reorganization in the case of eviction of the things that he contributes to the company as corresponds to all alienating parties, and to compensate for the defects of those things, as is the seller with respect to the buyer; moreover, if what he promised was the use of certain assets, he will respond for them according to the principles that govern the obligations between the lessor and the tenant ”.

Invalidity of civil society:

In the event that a civil society is formed with an illicit purpose, it will be declared void, at the request of any of the partners or an interested third party and will be put into liquidation.

Article 2692, Civil Code: “if a company is formed for an illicit object, at the request of any of the partners or an interested third party, the nullity of the company will be declared, which will be put into liquidation, after the debts have been paid In accordance with the law, the partners will be reimbursed what they have brought to the company.

The profits will be destined to the public welfare establishments of the place of the domicile of the company ”.

Article 2696, Civil Code:

"The company in which it is stipulated that the profits belong exclusively to one or some of the partners and all losses to another or others will be void."

Requirements that the civil society contract must contain:

Article 2693, Civil Code:

The partnership contract must contain:

The names and surnames of the grantors who are capable of being bound; The company name;

The object of the society;

The amount of social capital and the contribution that each partner must contribute; If any of these requirements are missing, the provisions of article 2691 will apply.

The civil partnership contract must be registered in the Civil Society Registry.

Article 2694, Civil Code:

"The partnership contract must be registered in the registry of civil companies to produce effects against third parties."

Article 2698, Civil Code:

"The partnership contract cannot be modified except by the unanimous consent of the partners."

Civil partnerships that take the form of mercantile companies will be subject to the Commercial Code. (Article 2695, Civil Code).

Civil society capacity to acquire real estate.

Article 2700, Civil Code:

"The capacity for companies to acquire real estate will be governed by the provisions of Article 27 of the Federal Constitution and its regulatory laws."

Those who will not be considered as Civil Companies:

Article 2701, Civil Code:

"Cooperative societies, nor mutual societies, which will be governed by the respective special laws, are not included in this title."

Civil Society Administration.

Article 2709, Civil Code.

“The administration of the company can be conferred to one or more partners. Having partners specially in charge of the administration, the others will not be able to oppose or hinder the efforts of those, nor prevent its effects. If the administration has not been limited to any of the partners, the provisions of article 2719 will be observed ”.

Appointment of the administration.

Article 2710, Civil Code.

"The appointment of the managing partners does not deprive the other partners of the right to examine the state of the corporate affairs and to demand for this purpose the presentation of books, documents and papers, in order to make the claims they deem appropriate.. The waiver of the right set forth in this article is not valid ".

Article 2711, Civil Code.

“The appointment of the managing partners, made in the partnership deed, may not be revoked without the consent of all the partners, unless judicially, due to fraud, fault or inability.

The appointment of administrators, made after the company is constituted, is revocable by majority vote ”.

Powers and limitations of the administrators.

Article 2712, Civil Code.

“The managing partners will exercise the powers that are necessary for the turn and development of the businesses that form the object of the company; but unless otherwise agreed, they need express authorization from the other partners:

to alienate the things of the company, if it has not been established, for that purpose; to pledge them, mortgage them or encumber them with any other real right; to borrow capital.

The supreme body of this society:

Article 2713, Civil Code.

"The powers that have not been granted to the administrators, will be exercised by all partners, resolving the issues by majority vote. The majority will be computed by amounts, but when a single person represents the greatest interest and in the case of companies with more than three partners, at least the vote of a third of the partners is needed ”.

Article 2714, Civil Code

"Since there are several partners in charge of the administration, without a declaration that they must proceed in agreement, each one of them may separately practice the administrative acts it deems appropriate."

Article 2715, Civil Code.

"If it has been agreed that an administrator can do nothing without the assistance of another, he may only proceed in another way, in the event that serious or irreparable damage may result to society."

Article 2716, Civil Code.

"The commitments contracted by the managing partners on behalf of the company, exceeding its powers, if not ratified by it, only oblige the company by reason of the benefit received

Article 2717, Civil Code.

“The obligations that are contracted by the majority of the partners in charge of the administration, without the knowledge of the minority, or against their express will, will be valid; but those who have contracted them will be personally responsible to society for the damages caused by them ”.

Article 2719, Civil Code.

“When the administration has not been limited to any of the partners, all will have the right to attend the direction and management of common businesses. Decisions will be taken by majority, observing, with respect to this, the provisions of article 2713 ”.

Surveillance body:

There is no oversight body but in fact it corresponds to all non-managing partners.

Dissolution and Liquidation of Civil Society.

Article 2720, Civil Code.

Society dissolves:

By unanimous consent of the partners; For having fulfilled the term prescribed in the partnership contract;

Due to the complete realization of the corporate purpose, or because the achievement of the company's object has become impossible;

Due to the death or incapacity of one of the partners who have unlimited liability for the social commitments, unless in the articles of incorporation it has been agreed that the company continues with the survivors or with the heirs of the former; Due to the death of the industrial partner, always that their industry has given birth to the company; Due to the resignation of one of the partners, in the case of companies of indeterminate duration and the other partners do not wish to continue being associated, provided that such resignation is not malicious or untimely;

By judicial resolution.

For the dissolution of the company to take effect against a third party, it is necessary that it be recorded in the Companies Register.

Article 2721, Civil Code.

"After the term for which the company was incorporated, if it continues to function, its duration will be understood to be extended indefinitely, without the need for a new corporate deed, and its existence can be demonstrated by all means of proof."

Article 2722, Civil Code.

“In the event that upon the death of a partner, the company has to continue with the survivors, the part that corresponds to the deceased partner will be liquidated, to be delivered to his succession. The heirs of the one who died will have the right to the capital and profits that correspond to the deceased at the time of his death and, henceforth, will only have part in what necessarily depends on the rights acquired or the obligations contracted by the partner who died ".

Article 2723, Civil Code.

"The resignation is considered malicious when the partner who makes it intends to take advantage exclusively of the benefits or avoid losses that the partners should receive or report in common according to the agreement"

Article 2724, Civil Code.

"The resignation is said to be untimely, if when doing it, things are not in their integrity, if the society can be harmed by the dissolution that originated the resignation."

Article 2725, Civil Code.

"The dissolution of the company does not modify the commitments made with third parties."

Article 2726, Civil Code.

“Once the company has been dissolved, it will immediately go into liquidation, which will be carried out within a period of six months, unless otherwise agreed.

When the company goes into liquidation, the words must be added to its name: in liquidation "

Article 2727, Civil Code.

"The liquidation must be done by all the partners, unless they agree to appoint liquidators or who are already named in the social deed"

Article 2728, Civil code.

“If the social commitments are covered and the contributions of the partners are returned, some assets remain, they will be considered profits, and they will be distributed among the partners in the agreed manner. If there was no agreement, they will be distributed proportionally to their contributions ”.

Article 2729, Civil Code.

"Neither the capital stock nor the profits can be distributed except after the dissolution of the company and prior to the respective liquidation, unless otherwise agreed"

Article 2730, Civil Code.

"If when the company is liquidated there are not enough assets left to cover the social commitments and return their contributions to the partners, the deficit will be considered a loss and will be distributed among the partners in the manner established in the previous article"

Article 2731, Civil Code.

"If only what should correspond to the partners for profits has been agreed, in the same proportion they will be liable for the losses."

Article 2732, Civil Code.

“If any of the partners contributes only with their industry, without it having been estimated, nor having designated a quota that it should receive, the following rules will be observed:

If the work of the industrialist could be done by another, his quota will be the corresponding one by reason of salaries or fees and the same will be observed if there are several industrial partners; If the work cannot be done by another, his quota will be equal to the of the capitalist partner who has more;

If there is only one industrial partner and another capitalist, the profits will be divided equally between them;

If there are several industrial partners and they are in the case of section II, they will all take half of the profits and divide it among themselves by agreement, and in the absence of this, by arbitration decision ”.

Article 2733, Civil Code.

"If the industrial partner has also contributed some capital, it and the industry will be considered separately."

Article 2734, Civil Code.

"If at the end of the partnership in which there are capitalist and industrial partners, it will turn out that there were no profits, all the capital will be distributed among the capitalist partners."

Article 2735, Civil code.

"Unless otherwise agreed, the industrial partners will not be liable for losses."

Of financial information.

Although the law does not expressly indicate when and what financial information must be presented, it is estimated according to the author CPJoaquín Moreno Fernández, in his work "Company Accounting", on page 49, "that being a company of persons, the provisions for the Society in Collective Name that states: "The administration account will be rendered semi-annually, if there is no agreement on the matter, and at any time agreed by the partners."

Article 2718, Civil Code.

"The managing partner or partners are required to be accountable whenever the majority of the partners request it, even when it is not the time set in the partnership agreement."

Article 2710, Civil Code.

Observations:

Civil Society is accepted by professionals who practice their profession and come together to share their activity and strengthen their position in the market.

The managing partners are liable in a subsidiary, unlimited and joint manner for the social obligations with their personal assets. In this case, the personal assets of one partner may be affected and not that of others.

The industrial partners have participation in the profits and unless otherwise agreed, they are not liable for the losses.

Civil association.

The Civil Association is regulated in the Federal Civil Code in the Fourth Book of Obligations, in the eleventh title of associations and societies.

Concept.

Article 2670, Civil Code.

"When several individuals agree to meet, in a way that is not entirely transitory, to carry out a common purpose that is not prohibited by law and that is not predominantly economic, they constitute an association."

Civil Association Contract.

Article 2671, Civil Code.

"The contract by which an association is constituted must be in writing."

Statutes of the Civil Association.

Article 2673, Civil Code.

"Associations will be governed by their statutes, which must be registered in the Public Registry to produce effects against third parties."

The General Assembly, supreme body.

Article 2674, Civil Code.

“The supreme power of the associations resides in the General Assembly. The director or directors of them will have the faculties that the statutes and the general assembly grant them subject to these documents ”.

Article 2675, Civil code.

“The General Assembly will meet at the time established in the statutes or when it is called by the management. this must summon an assembly when it is required for this by at least 5% of the associates, or if it does not, the civil judge will do it instead at the request of said associates. "

Article 2676, Civil Code.

The General Assembly will resolve:

On the admission and exclusion of the associates; On the early dissolution of the association or its extension for more time than the one set in the statutes;

On the appointment of director or directors when they have not been named in the articles of incorporation;

On the revocation of the appointments made; On other matters entrusted to it by the statutes.

Article 2677, Civil Code.

The general assemblies will only deal with the matters contained in the respective order of the day.

Its decisions will be taken by majority vote of the members present.

The Associates:

Article 2672, Civil Code.

"The association can admit and exclude partners"

Article 2678, Civil Code.

Each associate will have one vote in the general assemblies.

Article 2679, Civil code.

The associate will not vote on the decisions in which he, his spouse, his ascendants, descendants, or collateral relatives within the second degree are directly interested.

Article 2680, Civil Code.

The members of the association will have the right to separate from it, with prior notice given two months in advance.

Article 2681, Civil Code.

Associates may only be excluded from the company for the reasons indicated in the statutes.

Article 2682, Civil Code.

Associates who voluntarily separate or who are excluded, will lose all rights to social assets.

Article 2683, Civil Code.

The partners have the right to monitor that the fees are dedicated to the purpose that the association proposes and for that purpose they can examine the accounting books and other papers of the association.

Article 2684, Civil Code.

Membership is non-transferable.

Extinction of Associations:

Article 2685, Civil code.

Associations, in addition to the causes provided for in the statutes, are extinguished:

By consent of the general assembly; For having concluded the term set for its duration or for having fully achieved the purpose of its foundation;

Because they have become incapable of carrying out the purpose for which they were founded;

by resolution issued by the competent authority

Dissolution of Civil Associations:

Article 2686, Civil Code.

In the event of dissolution, the assets of the association will be applied in accordance with what is determined by the statutes and in the absence of their provision, as determined by the general assembly.

In this case, the assembly will only be able to attribute to the associates the part of the social assets that is equivalent to their contributions.

The other assets will be applied to another association or foundation with a similar object to the one that has been extinguished.

Article 2687, Civil Code.

Charitable associations shall be governed by the corresponding special laws.

Conclusions:

Civil society.

Civil Society is governed by the Civil Code, through its eleventh title, and it will be considered this way when it is a society where the partners mutually oblige each other to combine their resources (capitalist partners) or efforts (through their industrial partners work) for the realization of a common purpose, of an economic nature but that is not commercial speculation.

It will need at least two partners, that its corporate purpose is lawful and that a written contract is made and registered with the Registry of Civil Companies.

For the name that this Society will bear, freedom of choice is given but Civil Society is requested to be added.

The members of this company will respond in a subsidiary, unlimited and joint manner when they are the ones who manage the company and when they are only partners, they will respond for the contribution they have made.

The types of contributions can be for cash or goods or in any case industry, the contribution of goods implies the transfer of ownership.

For the contract of this company it is necessary that it be in writing. It must contain: Names and surnames of the grantors who are capable of being bound, the business name, purpose of the company, amount of capital and contribution of each partner. It must be registered in the Civil Society Registry. For any modification the consent of others is necessary.

For the transfer of rights and the admission of new partners, for the exclusion of partners, the consent of all the others is necessary.

In this society there is the right of Both or of preference and the term will be 8 days.

The Administration of the Society is in the hands of the partners, for their appointment the managing partners must be in writing and this cannot be revoked without the consent of the other partners or by judicial means, due to fraud, fault or inability of the partners administrators.

Supreme Body of the company: it will be the meeting of all the partners and the matters that have not been granted to the administrators will be resolved by majority vote.

Surveillance Body: It does not exist as such but the supervision is in charge of all non-managing partners.

The Dissolution of the Company: it may be dissolved by the consent of all the partners, by fulfilling the term set in the contract of the company, by the accomplishment of the social purpose or by the impossibility of carrying out the object of the company, by the death or incapacity of one of the partners who have limited liability, unless the deed specifies that the partnership with the survivors or heirs is continued, due to the death of the industrial partner, due to resignation of one of the partners and the others do not wish to continue with society, by court order.

Liquidation of the company: After the company is dissolved, it will be liquidated within a period of 6 months, the words: in liquidation must be added in its company name.

It must be done by all partners, unless liquidators are appointed or are named in writing.

The industrial partner: only contributes with his work or industry, if a quota is not designated for him, the following must be observed, he must receive a quota at the rate of salaries or fees (this in case the industrial work could be done for another or if there are several), it will be equal to that of the capitalist partner who has more (in case his work cannot be done by another), if there is only one industrial partner and one capitalist partner, it will be divided equally the earnings. If there are no profits, the loss will be borne by the capitalist partners.

Financial information: it is not specified but according to the author CP Joaquín Moreno Fernández it must be followed as the Company in Collective Name, in the sense that it will be rendered semi-annually or at any time agreed by the partners.

Civil association.

It is regulated by the Federal Civil Code in the Fourth Book of Obligations, in the Eleventh Title of Associations and Societies.

Concept: it is when several individuals agree to meet in a not entirely transitory way, to carry out a common, lawful purpose that does not have a predominantly economic nature.

It must be constituted in a written contract. Where the statutes by which they will be governed are established.

The supreme organ of the Civil Association is the General Assembly, they will have the powers stipulated in the Statutes. It will meet at the time established in the statutes or by summons from the management. It will be in charge of: admission, exclusion of partners, dissolution of the association, appointment of directors, revocation of appointments.

They will have an agenda where the matters contained in it will be addressed. Decisions will be made by majority vote of the members present.

The associates will be able to admit and exclude partners, they will enjoy a vote in the General Assemblies, they will be able to separate with a period of two months to anticipate and notify of their separation, they will lose their right to the social assets.

The extinction of the associations: For causes provided in the statutes or by consent of the general assembly, for having concluded the term of its duration, for having achieved the purpose of its foundation, for becoming unable to carry out the purpose for which they were founded., by resolution of a competent authority.

The dissolution of associations: The assets will be applied in accordance with the provisions of the statutes, and in the absence of this, to what the general assembly determines.

The Assembly may only attribute to the associates what is part of the social asset that is equivalent to the contributions they made. The other assets will be applied to another association or foundation with a similar purpose.

¨ The Public Registry of Commerce is the public registry in which commercial acts are registered, as well as those that relate to merchants and that, according to the legislation, require it. The operation of the Public Registry of Commerce is in charge of the Ministry of Commerce and Industrial Development (Ministry of Economy currently).