Civil Society

We explain what a civil society is in law, its characteristics and examples. Advantages and disadvantages of this type of association.

civil society
In a civil society, the members manage assets jointly.

What is a civil society?

In commercial law, it is known as civil society to a type of contractual association (that is, by contract) in which two or more individuals undertake and undertake to jointly manage assets such as money or industry, in order to create a non-natural person who is not governed entirely out of the desire for profit, but which equally distributes its profits among its investors.

We are faced with a civil society, in this way, when Its members come together around a common goalwhose utility is appreciable in money, and in whose profits or losses all partners take part.

Civil society should not be confused with commercial society, although the distinction is subtle, from a certain point of view: the former is not established with the pure intention of generating profits, while the latter is. In fact, two civil companies can form a commercial companyif this helps them achieve their objectives.

A civil society can be of the following types:

  • Particular. It includes certain things, such as a company, its fruits or the exercise of a specific trade or profession.
  • Universal. It can be, in turn, of two types:
    • Of all present goods. The partners are owners of all the common assets of the civil society, as well as its profits, so it does not include assets resulting from inheritances, donations or legacies acquired later, but it does include their fruits.
    • Of all the profits. It covers everything that the partners acquire during the term of the association, although the movable and immovable property of each partner remains private, but their usufruct will be common.
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See also: Civil law

Characteristics of a civil society

civil society
A civil society is born at the very moment its creation contract is signed.

civil societies They can be public or privateaccording to whether or not they have, respectively, a legal personality. In the same way, they must have a legitimate objective as a goal, which is of common interest for all partners, who in turn are divided into capitalists (those who provide the money) or industrialists (those who carry out the work).

A civil society is born at the very moment in which its creation contract is signedand lasts until the instant of its end, which is always agreed upon (even if it is infinite). If it does not have legal personality, the agreements between its partners may be secret and, therefore, their actions totally individual towards third parties.

Examples of civil society

Some examples of civil societies may be:

  • Charitable institutions. Like Cáritas, the Red Cross, Favaloro Foundation, etc.
  • Local or regional sports clubs. Like Boca Juniors, River Plate, Manchester United, etc.
  • Private school organizations. Such as educational centers or private institutes, etc.
  • Workers associations. Like unions, tuition, etc.

Advantages of a civil society

civil society
A civil society does not require initial capital to be established.

Some virtues of a civil society are the following:

  • They do not require presentation to commercial registries, nor initial capital to be established. They are attached to the civil code.
  • It is usually simple to establish bureaucratically, and simpler to administer than a public limited company.
  • They aspire to the improvement of some aspect of society.
  • They are not required to make their accounts public.

Disadvantages of a civil society

Some drawbacks of a civil society are the following:

  • It is usually considered less solid and permanent than a commercial company, so it does not usually enjoy the financial benefits of the latter.
  • If the profits of the civil society are high, the tax payment (Income Tax) will be personal for each member and will be much higher than if it were a commercial company.
  • If it is universal, the liability to creditors can be unlimited and even cover the spouses of the partners.
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