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Civil Society – What it is, how it works and steps of creation

What is a civil society?

It is one of the most common types of society, since it allows a number of people to make decisions around a constituted organization, which are made collectively and aiming at a common good with the activity to which the company is dedicated. This type of society applies to the constitution of organizations that can be either social or civic institutions. However, it is also usually chosen at the time of constituting small businesses.

Its constitution implies the participation of two or more people who wish to carry out a project with a profit-making aim. The people who make up the company can make contributions as workers, but also as capitalist partners with the contribution of money or goods for the consolidation of the company and its subsequent operation.

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Characteristics of a civil society

This type of company is organized in a very particular way, since it can contain several forms of representation, as well as administration. That is to say, it can have a single administrator and also, joint or several administrators, who participate in the decisions taken at the company level.

With regard to all the aspects that make up the SC, we find

Liability of a company with a partnership: the partnership, in this case, is characterized by establishing unlimited and personal social responsibility involving the partners. This means that as long as the company acquires debts and obligations, the partners will be liable for them with their assets if they have exhausted the resources with the company’s assets.

Social capital: one of its particularities has to do with the fact that, in the case of the social capital, there is no established minimum social capital. This allows the costs of incorporation to be reduced and facilitates the procedures for the consolidation of the company.

In the case of real estate or rights in rem, the ideal situation would be to incorporate this type of city on the basis of a public deed, a procedure that would be carried out in the presence of a notary.

Partners: it requires a minimum of two people to be able to incorporate. These people must first acquire the faculty of being self-employed, so it is necessary for them to contribute to their social security independently. Furthermore, it is the partners who are responsible for the commitments acquired through the company.

Requirements: the incorporation of a civil company requires the payment of corporation tax, a process that works as in the case of Limited Companies (SL). The accounting books must be presented each year, together with the company’s accounts, to the Commercial Registry. In addition to the autonomy of the partners, there must be a private contract of the Civil Society, a document that will account for the activity of the organization.

It is important to have the statutes of the company clear, that is to say, the attributes, such as the corporate name or business name, the domicile, which will be the physical location, the assets consolidated from the resources of each of the partners, the corporate purpose which will be the activity of the company and the set of rules that will govern the company.

Steps to create a civil society

In order to build a civil society, we must take into account the following aspects:

Registration of a civil society: a private contract must be signed involving all the parties that will make up the civil society, usually known as a constitution contract. Once this has been done, it will be necessary to register with the Tax Authorities with the NIF, as well as with the Tax on Transmissions and Documented Legal Acts.

Once this is done, it will be necessary to apply for the Tax Identification Code (CIF), which allows the company to be identified for tax purposes. It is also necessary to have the Census Declaration, which determines the beginning of the activity.

Ministry of Labor: in case a worker is hired, it is required to request the employer’s number, registering the company in the social security. The company will have a valid registration for the legal or natural person that appears as the owner of the company. The opening of a new work centre requires the communication of the owner, that is to say, this information must be provided, as well as the transformations or extensions that are made.

Visitors’ book: this is a very important documentation space for civil society, which must contain each of the visits made by the Labour and Social Security Inspectorate in its activity as a constituted organisation. In some countries, the Visitors’ Book already operates electronically.

Last but not least, it requires proper registration to obtain Social Security independently.

Advantages of a civil society

One of the most important advantages of this type of society, has to do with the fact that we can count on a formal constitution much more economic and simple, in comparison with other types of societies, since it is not necessary to make a public deed.

On the other hand, with this type of society can be quoted under the minimum quota in the Regime of self-employed. This makes it one of the simplest models for starting up activities.

If you are interested in this type of company and you plan to incorporate it for your project, we recommend that you consult a specialized advisor who will guide you through the process.