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Capital Company: What it is, how it works, advantages and more 

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What is a capital company?

Often also known as capitalist companies or open companies, they are one of the modalities regulated by the Commercial Law. It is a type of company that has a patrimonial autonomy, so it changes its way of responsibility in front of the company’s obligations.

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Thus, capital companies are formed by either one or several partners, who become capitalist partners and have the same rights and duties as the partners of the partnership.

Characteristics of a capital company

In particular, this type of company can be organised in two ways, in the case of public limited companies or limited liability companies. Remember that to find out how each of these companies works, you can go to our specialized section where we tell you everything you need to know.

In addition to this, within the capital company we find the “express company”, a modality that has the power to be constituted within up to 24 hours, so it is one of the best alternatives for businesses that want to consolidate quickly.

Liability of a company with a capital company: it is established that there is a patrimonial autonomy in which the company responds to the debts acquired by the company from there, so that the partners assume a limited liability in front of these.

Another aspect to consider is that in the case of partnerships, the partners can respond in full or in part to the obligations of the company, but also in a subsidiary or joint manner, so that the liability is not closely linked to the agreement of their assets.

Share capital: although there is no established amount given that each type of company that is incorporated has different needs and conditions, it should be taken into account that in this case, the capital company requires a sufficient percentage to initiate activities or its corporate purpose. Thus, the capital consolidates the figure that will be stored as the company’s patrimony and will determine, at the same time, the measure of rights that are granted to the company’s network of partners. The share capital is very important for the creditors.

Partners: as we mentioned, this company can start to be constituted with one or more persons. Each one of them makes a contribution to the share capital and this will be the maximum value that could be lost within the activity of the company in case of obligations and debts.

Organization of the company: in capital companies, the most important governing body is the administrator, a position that is only held by one person. However, in many companies incorporated under this model, it is decided that this position should be assigned to more than one person. There are also the General Meetings, which can be ordinary or extraordinary according to the particular needs of the company.

Requirements: this type of company requires the Public Deed in order to be incorporated. The capital company needs to carry out the registration process in the commercial register within a maximum period of two months. This can be done from the moment it is registered or from the day the company starts its activities. It must also have the principle of determination, which indicates the contribution to which the capital amounts and in which it indicates all the related information, such as the number of titles in which it is distributed, either in shares or holdings.

In addition, it needs to have the principle of reality, which links the share capital in relation to the contributions made. And the principle of stability, which proposes either increasing the share capital or reducing it, which implies that the process required by the legislation in the place of location has been fully complied with.

Steps for creating a capital company

However, for the creation of the capital company, the constituent general meeting must be consolidated. This meeting is made up of special procedures, including the certificate issued by the commercial register, one of the basic documents for initiating the incorporation process.

Bank account: it is necessary to open a bank account in the name of the company. To this account will be deposited the share capital, as well as the shares of each of the partners.

What is a capital company

Advantages of a capital company

Among the main characteristics and also virtues of this type of society, we find that the amount of capital can easily vary. It becomes an advantage since it allows you to accommodate the conditions of the partners, as well as the needs of the business activity or the company’s corporate purpose. In addition, it makes it easier for you can be distributed within the Board of Directors.

The capital company allows a complete conditioning with respect to its management, since it is possible to consolidate functions of a very varied administrative nature, since it allows the implementation of different investment strategies in which private capital, traditional funds, hedge funds or real estate funds, among others, can be used.

Find out more about this type of company by getting advice from an expert in the area. This will be of great help if you are planning to consolidate your company within a partnership to start your activity. Furthermore, knowing the current regulations in your country will allow you to follow a much more efficient and safe process.