What is the legal entity?

Of course, the name of a legal entity is widely listened to by a large part of citizens, even when they really know what its meaning is. To correct this linguistic incidence, it will be necessary to emphasize that it simply refers to a fictitious person capable of exercise rights and obtain the obligations to carry out activities that cause full legal responsibility. It is especially important to develop a wide range of contracts in which this very particular figure is required and which can be understood even better with a series of examples.

One of the aspects that must be highlighted from the beginning is that it does not have to coincide with the figure of the natural person. Because in reality, in some cases it will be the same, but in others it is not. Among other reasons due to the fact that the concept of person is much broader by allowing actions that have to be done, both with companies as with people. Its breadth, therefore, is one of its common denominators and the meaning to which this term that you have heard so many times in your life is directed.

On the other hand, it is necessary to know that the role that is given to a certain social or professional group is greater so that it can participate in a procedure of legal system. With the fundamental purpose of complying with the purposes pursued by all its participants. Not surprisingly, there is a risk of confusing this very relevant term with that of an individual person when in fact it is not, as has been explained in this short introduction.

Legal person: differences

It is necessary to know above other considerations that there are some very substantial differences in terms of other of the most common terms in this class of topics, such as the natural person. Well, the latter will be personally responsible for the debts and obligations that a company can take over at some time or another. Although on the contrary, in the legal person this incidence is limited to the assets of the company. Another of its differences is that the physical person is made up of a single person.

Another important sign to recognize this very special figure is based on your own accreditation. In other words, it is applied so that a person or entity (of any type) has rights and obligations at the same time. This is very important for the legal procedures you may go through. Or even for him start-up of a company or professional project. As we might expect, it determines future actions in various areas of the administrative procedure. To the extent that they can be valid for the granting of financing or aid of any type and condition.

Links with other figures

Nothing better than highlighting other comparisons to get to the true meaning of the word that concerns us in this post. To this end, one of the most relevant keys to detect what the legal figure is materializes with something as simple as that they can be sstock companies, stock companies, indistinctly. In both cases, legal persons are present. Even though on certain occasions you should know that this figure is hidden under the name of the companies. To avoid liability in the event that someone makes a claim to them, and although it is a legal procedure, it is necessary to explain that it is not a highly recommended practice from an ethical point of view. Beyond other considerations that will be the subject of other more specific analyzes.

Do you want to know some of the examples that represent a legal person? Well, you may have a few surprises because they will include so well known to all, such as Inditex, El Corte Inglés or Leroy Merlin. In other words, they can even own companies that are listed on the stock markets. Because in reality, in several cases he can represent companies that exercise a Comercial activity. As in the case of those that we have explained in this post. From this dynamic you already have a little clearer what the real impact of this term is, which can be a little more complicated for its correct understanding.

Advantages of this legal dynamic

Whatever the case, the legal person involves a series of contributions if it is integrated into this figure. You may already know some of them, but others may surprise you and even benefit you from them. Among which are those that we expose you below:

• You are in a position to have a higher capital because it can be contributed by the other partners. It consists of a very effective strategy to improve businesses, companies or any professional project.
• In all cases you will have a better access to credit lines marketed by banks. Preferably other types of clients, including individuals. But with an added value such as that they will be formalized with better contracting conditions so that from this dynamic you save a few euros in the accounting operation.
• Another of his most relevant contributions lies in the fact that a legal person is in a position to enter public tenders without important restrictions. With a certain preference in relation to other figures and that can help you achieve your objectives in terms of these approaches.
• With respect to the previous chapter there is another derivation that can be very interesting to defend your personal interests and even from a professional point of view. It is the fact derived from involving a series of social benefits and safe and that they could not otherwise obtain. Even to be receptive to a very specific line of aid launched from official organizations.
• And in short, it cannot be forgotten at any time that legal entities have limited liability. This in practice means that they significantly restrict your liability for obligations or debts that the company may incur. To the point that this fact can be very advantageous to them at some point in their lives.

Disadvantages of legal persons

But not all are benefits with this special figure, but there are some drawbacks that you should pay attention to if you find yourself in any of these situations. To this end, it is not surprising that you get the odd surprise with certain approaches. Like the ones we are going to show you below.

• There is no doubt that its biggest drawback is that it needs a higher investment by its constitution. In other words, it will involve a greater financial effort that you must make to become a legal person if that is truly your desire.
• On the other hand, the administrative effort it will be much greater. It is not surprising that you are left with no choice but to submit a greater number of accounting documents. This can be counted by people who have gone through this situation since the bureaucratic procedures will increase above normal.
• The control of society it is more diffuse than in the rest because the management can fall on several people. They are considered partners and there will be more debates to make an election or carry out some economic or legal administration. This is a difference that sets many people back in their desire to establish themselves as a legal entity.
• Undoubtedly, another of his most negative contributions is based on the fact that this figure presents a greater difficulty to be closed or sold. It is not as simple a procedure as can occur with other types of figures.
• If what you really want is to expand or decrease equity Of course, more trouble awaits you as the restrictions are greater. To the point that you can be immersed in incidents from an accounting point of view.
• Finally, you should pay attention that the legal entity is not always the best feasible scenario to establish a company. On the contrary, there are other formats that will be more useful for defending your personal interests. You should only find out about them if you are interested in adopting a constitutional formula.

Government bodies

Another very important aspect is that which has to do with its regulation. To this end, the existence of individuals who decide the destination of the merchandise that you have at your disposal is very necessary. It must not be forgotten that the bodies are regulated by law and also by the statutes presented by legal persons. Among those that stand out for their special importance are the following:

1. The administrator it is the most common of all.
2. A more complex figure as it is in the specific case of the so-called solidarity administrators.
3. The Board of Directors It is one of the terms with which you will be more familiar since it is used with special frequency by legal persons.
4. And as a last resort, other governing bodies such as the shareholders or the board of partners, among some of the most important and at the same time common. There is no doubt that they will be the most familiar to you right now.