Civil society

civil society

When it comes time to start working, you have the option of doing it for someone else or on your own. And, in this second case, you can choose to be autonomous or to create a society, such as civil society, thus taking advantage of the advantages it has (although also complying with the obligations that are required).

If you have heard of this figure but do not know what a civil society is, what its characteristics are, or how it is constituted, here you will find a guide that will surely clarify many doubts that may arise.

What is a civil society

First of all you have to know what a civil society is. This can be defined as a private (or public) contract that is signed between two or more people who want to do the same activity and that this is for profit. Therefore, these people are linked to the same common good, which would be work, although it may also be the case that some people do not contribute the work, but the goods or money that is needed to carry out this work.

This is one of the most used figures for small groups that come together in order to create small businesses, with hardly an investment, and with a management that is very easy to carry out. But keep in mind that it has certain peculiarities.

Characteristics of a civil society

What is a civil society

In this case, for it to be considered a civil society, the following must be fulfilled:

  • That there are at least two partners in this partnership.
  • There is a constitution contract, that is, a document signed by all those who make up the company.
  • That all partners are registered as self-employed.
  • They have a personal and unlimited responsibility, that is to say, that in case a problem arises, they must respond with all present and future assets on the part of each partner.
  • That they comply with the taxes that affect them, such as Corporation Tax.
  • That they are governed by both the Civil Code and the Commercial Code.

Provided that a civil society guarantees all these points, it can be considered as such for all purposes.

What are the advantages of a civil society

What are the advantages of a civil society

For many, the creation of a civil society is the solution to the problems they have, or the possibility to carry out the work or the relationship they hope for. And the truth is that a civil society offers many advantages for the partners who create it. But what are those advantages?

Easy to set up

In fact, as long as everything is carried out by common agreement, the procedures to establish a civil society are not complicated, on the contrary. In fact, it is much cheaper than with other companies.

Accounting and management are not a problem

Because we are talking about a society that has everything determined under a private contract, each partner knows perfectly what is expected of him and what he must contribute, as well as what he will earn. Hence, accounting and management is easily done.

Self-employed, but with benefits

Yes, it is true that a civil society requires members to be registered as self-employed, but one of the advantages they have is that they can receive social security benefits, such as unemployment.

What obligations does this company have

Belonging to a civil society is not only being part of a group that constitutes a society, there are obligations and rights of the partners that must be taken into account.

Specifically, there are obligations of the partners between themselves or with the company, in terms of contributing what was promised (goods, money, work, etc.), to attend to the general interest of the partners (that is, the joint decision prevails over to the individual) and to reimburse and take responsibility if there are damages to be faced.

In turn, the company itself must respond to each partner in the amount that has been stipulated by contract, either as benefits or as debts.

The partners are also obliged to third parties, in the sense that they must attend to the work or service for that third person. For example, in case the company has been hired by a third person to carry out a job.

How to constitute a civil society

How to constitute a civil society

Establishing a civil society is not difficult, but it is not a matter of a few minutes either, since the guidelines must be established so that everything is well tied. In fact, before starting the steps to create a civil society, the experts themselves recommend that a private contract be carried out between the partners who are going to form part of the society. And that said contract is raised to a public deed.

What is this contract for? It should stipulate all the conditions that concern people and society. For example, it will reflect what is the contribution of each partner, the activity that they are going to carry out, what percentage of profits (and also losses) corresponds to each one, how the company will be dissolved ... In short, all the issues that can influence the development of a society. Also here the positions they will have should be reflected, that is, if they are going to be joint, joint, sole administrators ...

In addition, it is important that each member of that civil society register with Social Security. They have to do it as freelancers and each one must comply with the procedures that correspond to the Treasury.

The codes of civil society

For its part, civil society is going to be governed by two codes, the Commercial Code and the Civil Code. The first will be for matters of a commercial nature while the second will be for the obligations and rights of the partners and society in general.

Once this step has been taken, and there is a «constitution contract», either private or raised to a public deed (which is the most recommended), you must provide form 036 by all partners. This model serves to prove that the partners have registered with the IAE (Tax on Economic Activities). In turn, you also have to register with Social Security, specifically in the self-employed regime.

Then, it is the turn to pay the Tax on Patrimonial Transmissions and Documented Legal Acts. This must be settled whenever goods are contributed, and 1% is applied on the value of those goods.

Finally, there would only be registration with the City Council to obtain the operating and opening licenses.

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