What types of legal vehicles exist?

Once you have a business idea and have developed a well-structured business project, it is important that you take into account the definition of a legal entity in order to establish your company.

In this article we will explain to you about the main legal provided in Colombian legislation for the exercise of any economic activity, as well as the most relevant characteristics of each one of them and the important elements in the creation of a company.

 

Learn about the types of companies in Colombia.

 

Differences between individuals and companies

 

Individuals:

According to Article 74 of the Civil Code, “all individuals of the human species are persons, regardless of their age, sex, race, or condition …”. With regard to the commercial registry, the natural person is that individual who, acting in his own name, professionally deals with some of the activities that the law considers commercial.

 

These are some of its main characteristics:

• The individual is extinguished with real or presumed death.
• His capacity is full once he reaches 18 years of age, as long as he has not been declared incapable by means of a sentence.
• Once full legal capacity is acquired, it acts on its own.
• It is identified with the Citizenship Card (CC).
• There is no equity division, it is responsible for all activities and operations with its own equity.

 

Companies:

The legal entity is relevant since it was created with the aim of being able to articulate the right to association, through capitalist evolution, which makes it an indispensable figure in the development of stable societies.

 

These are some of its main characteristics:

• Its existence begins at the moment of officializing the requirements demanded by law, such as the granting of the public deed and the registration in the respective chamber of commerce.
• It is extinguished with the approval of the liquidation of the company.
• Its capacity is total only in those matters related to the corporate purpose that has been established by the partners in the company’s bylaws.
• Acts through its legal representatives, administrators, managers, directors, etc.
• It is identified with the Tax Identification Number (NIT).
• There is an equity division, the company has a different equity from that of the individuals that are part of it. The company is responsible for its own obligations, except in those companies in which the law expressly indicates that the partners are also responsible.

 

Types of legal entity

There are two types of legal persons, which are:

• Companies of Public Rights: These are those alternatives that represent the entities that look after their interests and do not seek a profit of money. Its purpose is aimed at the common benefit, the moral or intellectual improvement of the associates, the defense of their rights, among others.
• Mercantile companies: Those that represent private interests, regulated by specific commercial codes: Associations, companies, cooperatives, commercial civil societies, etc.

 

By its origin

According to their origin, legal entities can be:

• National
• Foreigners

 

Finally, it is important to note that a company must be legally represented by one or more individuals or companies and that there cannot be a company without legal representation.

 

These are the most common mistakes in bookkeeping for a business.

 

As we have seen, setting up and register companies in Colombia is a process that requires full attention and regulation, since this will define the approval of your activity. Our experts at JLC ​​Auditors want to share with you the step by step you must follow so that your business or company complies with all the requirements established by law economic before the different national entities, therefore it is important to leave the process in expert hands.