gainful manufacturing, construction, trade, service (and extraction of minerals) activity organized...
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Business activity definition
Gainful manufacturing, construction, trade, service (and extraction of minerals) activity
Organized
Constantly
And also professional activity
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Entrepreneurs:
Natural person Entity without corporate status (an
unincorporated entity with legal capacity)
Legal entity Cooperative Running business in their own name
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Sole trader
Natural person Takes all responsibility for liabilities Is liable with all his assets (no limits)
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Sole
trad
er
Advanta
ges
Disa
dvanta
ges
Easy to set up („one window scheme” procedure) No legal and financial barriers (no permits and
licences, no initial capital, no fees) Single-entry bookkeeping (simplified method of
accounting) Flexibility and easy to manage Sole trader gains all profits (without taxes) Lower social insurance contributions (not lower
than 30% of minimum remuneration for work)
Unlimited liability for business debts (including his or her private property)
No legal distinction between the owner and the business (sole trader = natural person)
Not enougt power on the market (credits, presitge…)
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Registering as a sole trader
Idea for a business
One window scheme
Additional duties
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Civil law partnership
Relatively small-scale business activity conducted by at least two entities
Partners Business name Civil law partnership is not a separate legal
entity. Only its partners are such entities However, civil law partnership is subject to
VAT and excise tax as if it were a separate entity
There is no initial capital
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Civil law partnership
Civil law partnership agreement should specify, as a minimum (art. 860 CC):› common economic purpose, for which the partnership
is established› indication of each partner’s actions serving the
intended purpose Property (or its absence - entirety) Contribution (art. 861 CC) Distrbution of profits – included in civil law
partnership agreement vs absence in… (art. 867 CC)
Participating in losses and profits (art. 867 CC)
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Civil law partnership
Representation (art. 866 CC):› Unless otherwise agreed each partner may
represent the partnership individually Running the partnership’s affairs (art. 865 CC):
› The right and obligation of each partner to conduct the partnership’s affairs
› Day-to-day actions (ordinary partnership’s acts)› Extraordinary partnership’s acts› Urgent acts
Liability (art. 864 CC)› Joint and several liability of all partners for
obligations arising within the partnership
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Civil law partnership vs commercial partnerships
Civil law partnership Commercial partnerships
source Civil code Commercial partnerships and companies code
Legal capacity
Has no legal capacity An unincorporated entity with legal capacity
Property No property.It belongs jointly to partners
Have property i.e. from contribution
Liability Jointly and severally Jointly and severally + subsidiary
Creation Informal formal
Contributions Not needed needed
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PartnershipsGeneral partnership
Professional partnership
Limited partnership
Limited per shares partnership
Deed & Set up procedure
In writing under the pain of nullity + registration in National Court Register
In writing under the pain of nullity + registration in National Court Register
Notarial deed + registration in National Court Register
Notarial deed + registration in National Court Register
Partners Natural persons, legal entities & an unincorporated entity with legal capacity
Natural persons only*
Natural persons, legal entities & an unincorporated entity with legal capacity
Natural persons, legal entities & an unincorporated entity with legal capacity
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Representation
art. 29 – every partner shall have the right
Art. 96 – each partner shall have the right (compare art. 97)
Art. 117 i 118 – general partners only! Limited partners with proxy
Conduct p. affairs
Look at the deed!Every partner shall have the right and dutyOrdinary acts, extraordinary and urgent
The same as in GP + art. 97
The same as in GP but look at art. 121 (Limited partner has no rught and duty)
Liability Art. 22 §2 jointly and severally + subsydiary
jointly and severally + subsydiary; connected with liberal profession (art. 95)
jointly and severally + subsydiary; limited partner -> art. 111
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Commericial partnerships and companies
“By means of a deed of commercial partnerships and companies, its partners or shareholders shall undertake to persue a common objective to be attained by making contribution and, where the partnership or company deed or articles so provide, by operating in another manner specified therein”Art. 3 CCPC
“A partnership may, in its own name, acquire rights, including ownership of immovable property and other rights in rem, incur obligations sue and be sued” Art. 8 CCPC
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General partnership
Definition – art. 22§1 CCPC Business name – art 24 CCPC Deed in writing under the pain of nullity –
art. 23 CCPC GP comes into existence upon entry into
the register – art. 251 CCPC Deed’s content: parties of the agreement
(partners), business name, seat, specification of contribution, the object of the partnership’s activity, lifetime of GP
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General partnership Representation – art. 29 CCPC
› Court acts (i.e. at trials, signing claims)› Out-of-courts acts (i.e. signing the
contracts) One man representation - art. 29§1
CCPC vs. deprivation or jointly - art. 30§1 CCPC
Liability – art. 31 & 22§2 CCPC› 1. subsidiary› 2. partners without limits, all their
property, jointly and severally
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General partnership Internal relationships
› Deed’s provisions (compare art. 37 CCPC)› Every partner shall have the right and duty
to conduct affairs of partnership art. 39§1 CCPC*
› Three types of acting (Ordinary - art. 39§1 and 42 CCPC, Extraordinary - art. 43 CCPC , Urgent – art. 44 CCPC)
Sharing profits and participating in looses art. 51 CCPC
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Professional partnership
Definition – art. 86 CCPC; set up for practicing liberal profession
Partners – art. 87 CCPC & art. 88 CCPC Business name – art. 90 CCPC Deed in writing under the pain of nullity – art. 92 CCPC PP comes into existence upon entry into the register –
art. 94 CCPC Deed’s content: parties of the agreement (partners –
natural persons practicing liberal profession ), business name, seat, specification of contribution, the object of the partnership’s activity, lifetime of PP + partners liable for obligations (look at art. 95§2CCPC), representation (in case of exclusions)
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Professional partnership
Liability› Connected with liberal profession (art. 95
CCPC)› Not connected with liberal profession (like
general partners) Representation art. 96 CCPC
› One man representation (unless deed provides different
› Management board Other* -> look at 89 CCPC (GP rules obey)
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Limited partnership
Definition – art. 102 CCPC Business name – art 104 CCPC Notarial deed – art. 106 CCPC LP comes into existence upon entry into
the register – art. 109 CCPC Deed’s content: parties of the agreement
(partners), business name, seat, specification of contribution, the object of the partnership’s activity, lifetime of LP + “commandite sum”
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Limited partnership
Representation› General partners – art. 117 + 103 CCPC (like
general partners in GP)› Limited partners – art. 118 CCPC (proxy)
Liability› General partner – like in GP (102+103 CCPC)› Limited partner – art. 111 CCPC
Internal relationships› General partners – like general partners in
GP› Limited partners – art. 121§1 and art. 121§2
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Companies
Limited Liability Company Joint-Stock Company
Shareholders shall not be liable for the obligations of the company
Shareholders rights
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Companies
Acting by bodies› Management board (representation and
conducting companies affaires)› Supervision board› Meeting of shareholders (the most
importatn body)