What is a Constitutive contract?

Also known as "Constitutive instrument", it is a document that is notarized by a public notary in order to recognize that a commercial sociaty exist with all its necessary elements to work.

In other words, it is an instrument that determines all kinds of commercial sociaty's features and regulation before any legal instance.


Constitutive contract Content

This kind of public deed has to acomplish some requirements to be aproved by a public notary public. It may change from one country to another but they usually are the following:

Requirements

  • Contract signature's date and place
  • Sociaty and partners
  • Partners society identification
  • Social Denomination and Business Name
  • Sociaty's location
  • Company purpose
  • Social capital's amount
  • Contribution amount by every five partners in money or goods
  • Period of time
  • Company structure
  • Profits distribution rules
  • Previsiones sobre la constitución de reservas
  • Stock constitution prospect
  • Necessary clauses related with partners obligations and rights.
  • Sociaty's dissolution clauses
  • If necessary, an arbitrary jurisdiction commitment

And, acording to each country's commercial law, any constitutives contracts modification must be published in a national circulation newspaper.
What is a Constitutive contract? What is a Constitutive contract? Reviewed by Diego on 11:35 Rating: 5

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