Meaning of commercial company (what is it, concept and definition)

What is Mercantile Company:

The commercial company is a legal person whose purpose is to carry out acts of commerce subject to commercial law. The commercial company has a nominative character where there is an obligation and the application of that contribution to achieve an economic purpose.

Mercantile companies originate when 2 or more people through a contract are obliged to make contributions to build the company's capital stock to become the assets that allow the commercial activity to be carried out and, in turn, the partners they participate in the profits and losses suffered by the company.

Regarding its constitution, there are different types of commercial companies such as: corporation, company in collective name, limited company, limited partnership, among others. Likewise, de facto and irregular commercial companies are observed.

Mercantile companies are in fact those that were not documented in public or private deed, on the other hand, the irregular commercial company is one that was documented in deed but was not registered or the articles of incorporation were not published as required by law or, its term expired, that is, it lacks any requirement established by law.

It is noteworthy that a commercial company can change its structure as many times as necessary, that is, it can merge with another company, divide, change partners, change commercial activity, appoint new members, change statutes established in the document, among others with the particularity of registering all the changes that it undergoes in the Registry where it was incorporated.

Likewise, a mercantile company can be dissolved, when its partners decide to end the activity, that is, to terminate it for reasons established in the law or in the statutes, as a consequence the mercantile company must be liquidated, transforming all assets into money. the purpose of canceling the liabilities and the rest to distribute among its partners according to their actions.

Each country contains the legal regulations to regulate the different mercantile companies, as is the case of Mexico that has the General Law of Mercantile Companies amended in 2009, in Argentina they are governed by the Law of Commercial Companies and, in Spain, the Companies Law Capital.

Characteristics of commercial companies

Commercial companies are characterized by acting on their own behalf with a name or denomination under a domicile, capacity and own assets. The constitution of the mercantile companies must be carried out by means of a social deed that contains all the aspects established in the commercial code and, later, it will be registered in the Public Registry.

Excision of commercial companies

The spin-off of commercial companies refers to a company called spin-off, liquidates its assets and divides all of its assets, liabilities and capital into 2 or more parts that are transferred to new companies that were incorporated that are called spin-offs, this process is called total excision. However, it is not a requirement that the spin-off company be extinguished since it can continue to carry out its commercial activity and contribute part of its capital, liabilities and assets to the new companies, it is what is known as a partial spin-off.

Merger of companies

The merger of companies as indicated by its name refers to the integration of 2 or more companies to form a single legal entity. The merger can occur under 2 figures; A first known merger by absorption is that a company absorbs the other companies and will assume the obligations, rights and assets of the others, while a merger by integration is observed when all the companies disappear and a new one is created that acquires all the rights., obligations and assets of other companies.

The merger is carried out in order to increase productivity and, therefore, company income, as well as decrease production and distribution costs.