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Factual society – Definition, requirements and steps to open it 

What is a de facto partnership?

This type of company differs from the others because it does not have a legal status, which allows it to operate without being governed by the Commercial Registry. Thus, it is a society in which its constitution is consolidated from the will of two or more people to start activities.

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The company does not have an express agreement between the two partners, as their meeting is held with the aim of achieving a common objective. In other words, it is possible to operate without legal recognition, although this does not mean that it loses its validity. There is no contract establishing rules of association.

Characteristics of a de facto society

One of the most important particularities of de facto companies has to do with the fact that they can be represented by any partner who is part of the company.

Partners: a minimum of two partners are required to initiate the partnership, although there is no maximum number of partners that must be within the company. As we mentioned, the partners who are part of the company do not acquire legal capacity. Their rights operate according to the agreement that has been established in relation to the company’s social activity.

Liability of a de facto company: in this aspect, the liability of the partners in the company is unlimited. They can be jointly and severally liable depending on the company’s operations.

Partners: the de facto partnership may be formed by two or more partners, although there is no established maximum number of members. Remember that their liability is unlimited and they are not listed as legal entities. The person who incorporates the company is free to dissolve the company at any time without the need for a consensus.

Requirements: each of the partners must be up to date with the renewal of the Commercial Registration. The registration process requires all partners to be duly registered, for which purpose a cover sheet with a commercial annex must be filled out, registering the personal data of those who will be part of the de facto partnership network. The commercial registration process is carried out the month following the date on which the company is constituted or just after it starts its activities.

The company incorporated must register with the Single Business Register and the RUES Social Register, if it has more commercial establishments in operation. Thus it requires that the facts have common exploitation, where the shares must be both placed under the alleged partners. The collaboration of each of them will depend on the contribution to equalize the conditions.

Cancellation of registration: once the company stops carrying out commercial activities, it is necessary that all the natural persons who are part of the company, proceed with the cancellation of the commercial registration as well as that of the commercial establishment. This process must be carried out on the basis of a written request with a signature authenticated by a notary.

In many cases it is recommended that a shareholders’ agreement is drawn up from the outset with the help of an expert, which is of vital importance for the operation of the company. This is a private agreement between the members specifying the functions and forms of remuneration of each of the partners, the commitment of permanence, agreements of the company’s governance, the form of transfer of shares and confidentiality in relation to company information.

What is a de facto partnership

Steps to create a de facto company

For the process of registration of the company as a de facto establishment, it is required that the associates present a commercial annex that is signed by each of the members. Only if these persons have legal power, this document must be signed by the person who is in the position of legal representative.

Registration: to start the process of incorporation and registration, it is necessary to acquire the single business registration form and a commercial registration annex in the case of a business establishment. Also, a copy of the RUT format and its correct completion is required.

Once this has been done, the registration fees as a natural person and with the commercial establishment are cancelled. A copy of the identification document is attached. During the first three months of the year, every year, the partners or members of the partnership, in fact, must fill out a unique business registration form, which must be presented and subsequently, cancel the corresponding legal rights.

Minutes: on this The document, as well as the public deed, must contain all the basic information about the company, as well as a series of general terms in clauses, including the background, the purpose of the company or the activity it carries out and that which it will carry out in the future, the estimated duration of the company in fact, its address, the legal representative, the causes for dissolution of the company, appearances, amendments to contracts, reasons for sanctioning or excluding partners, among other basic aspects.

Bank account: it is required to open a bank account in which the company’s capital is deposited. Once the necessary percentage is paid, which may vary according to the country of location, it will be necessary to request certification from the bank, which will certify the deposit of money and become a requirement for the incorporation of the company.

Statutes of the company: it is necessary that this process is carried out with the guidance of a lawyer or a notary who advises us. Although it seems very simple information, the truth is that it requires great care at the time of the diligence, taking into account the type of company to which we plan to consolidate. The content of these statutes must include the share capital, the name or denomination of the company, the corporate purpose, the domicile, the form in which the company will be managed and the forms of deliberation and contribution by the partners.

Advantages of a de facto company

One of the most important faculties of this type of society has to do with the fact that it implies a simple process for registration, this if we take into account the current conditions in such a bureaucratized world. In this process, moreover, administration costs are reduced significantly and it allows de facto companies to be created without involving a large amount of money accumulated within the share capital.

The de facto society has more freedom in relation to its regulation and state control since it does not have an established legal and administrative support. It is not obliged to register, it applies a tax regime that allows it to save costs and the tax burden is much lower compared to other types of companies.

To continue with your incorporation process, make sure you have the guidance of an expert with whom you can set the course for your company.