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Unit-3-imprimir.pdf
TODOS LOS TEMAS RESUMIDOS (1-10)

1º Derecho de la Empresa

Grado en Administración y Dirección de Empresas (Inglés)

Facultad de Ciencias Empresariales

Universidad Pablo de Olavide

Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su
totalidad.
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Lesson 3: The Commercial Entrepreneur

The Oxford Dictionary says that the entrepreneur is the owner or manager of a business
enterprise who, by risk and initiative, attempts to make profits. But the certain concept
is that the entrepreneur is a natural or legal person of a private nature who acts on his
own behalf or through other people, and performs to the market a commercial,
industrial or service activity.
Commerce Code (XIX) uses the concept of trader or merchant, but today it is preferable
to use entrepreneur or businessman. That is because Commerce Code is thinking about
the merchant as the typical entrepreneur. So, it excludes: some small entrepreneurs that
do not have a real company (ie, craftmen), people dedicated to primary activities: ie,
farmers and some liberal professionals, like lawyers.

Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad.
(Formal merchantability refers to capitalist societies (corporations) are always
mercantile entrepreneur.)
Main characteristics of the entrepreneur are:

 He means the apex of the pyramid staff that supports the business.
 Business is displayed in his name, directly or through its subsidiary.
 He has the higher power to order and decide.
 He aims to make a profit.
 He assumes the risk and peril of operations.
The importance of being entrepreneur is that he shall be held in a certain legal status
(= set of specific rights and duties). And also If he is a party in a contract, the contract
will be defined as commercial.
Main classification of entrepreneurs:
Public/private: it depends on who is the owner.
Sole trader/legal person
 Sole trader: he has no separate assets (Art. 1911 Civil Code: the debtor is liable
for the performance of his obligations with all present and future property)
 Legal person: The corporation has a separate property, different of its partners,
who can also be liable for debts depending on the social type.
Individual entrepreneur (sole-traders)
The requirements for being a trader are: art. 1.1 Commerce Code: those who, having
the legal capacity to engage in business, do so habitually. (Legal capacity: art. 4: legal
age and free disposal of their assets.) (Legal age: 18 years old. Not emancipated. Having
not been incapacitated.)
Conclusion: minors and incapacitated adults lack the legal capacity required by law
cannot be sole-traders.

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Art. 5: In case that the sole-trader die or have to stop the ongoing activity and the only
inheritor in incapacitated, the legal representatives of the heritor may CONTINUE the
commerce previously conducted by their parents or predecessors by means of their
guardians. It’s an exception: so, restrictively interpreted. They cannot begin a new
business, only continue what they have received mortis causa.
Effective and regular practice of business activity.
Art. 3 presumes habitual exercise of commerce when the person announces this by
means of circulars, newspapers, signs displayed to the public or by any means.
Legal notion of trade:
 Positive: trade, industry and certain services included in the Commerce Code (=

Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad.
banking, stock exchange, insurance, etc.).
 Negative: agricultural and craft activities, liberal professions.
(A third requirement, not mentioned by law but by case law: a sole trader has to act on
his own behalf. Otherwise, agents or factors might accordingly be also deemed sole
traders.)
The status of sole trader is not conferred by registration or authorizing burdens: only
the actual fulfilment of legal requirements.
Even if all capacity requirements are complied with, a person legally capable to run a
business may not be allowed to do so. There are prohibitions, incompatibilities and
incapacity cases
 Prohibitions: judges, magistrates, certain Government members, civil servants,
so on.
 Incompatibilities: to prevent illicitly competing by reason of this position:
partners in a partnership (“socios colectivos”), factors, captains of ships, etc.
 Inability: temporal banning of trade: insolvency cases.
Art. 1271 Civil Code:
All things which are no beyond the bounds of commerce (más allá de los límites que
establece el codigo commercial, por ejemplo, el cuerpo. No puedes vender tu cuerpo
porque está más allá de los límites comerciales.) between men may be the subject
matter of a contract, even a future thing.
Trade by married people
It only refers to the patrimonial issues. Of course, married people may be trader, but,
¿what property is liable for the sole trader’s debts?
Remember: Patrimonial effects of marriage: they are given a patrimonial regulation
upon marriage (set of rules that govern their property relations). Although they can
agree a legal scheme of marriage, the legal standards are:
Separation of property: benefits and profits of the spouses are theirs.

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Joint ownership (applicable by default). Benefits and profits belong to them

jointly. There is a kind of community, without personality, a separate estate.
When marriage comes to an end, the community is finished and the spouses
have to distribute the properties.
As a general rule, commercial activity carried on by one of the spouses can bind only his
own property. But it can exist a prenuptial agreement or an express consent that

Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad.
changes this rule.
Prenuptial agreement:
Art. 1315 y 1325 Civil Code: “marriage articles” (capitulaciones matrimoniales).
In the prenuptial agreement, spouses can stipulate, amend or replace the property
regime of their marriage or any other provisions. They can include the express CONSENT
to the business activity of the trader. In this document, the spouses can agree different
things. Mainly:
o General rule: the only assets subject to liability for the trader’s debts are his own
assets and those acquired with the proceeds of business.
o Common assets: only subject to liability with the consent of both spouses. The
consent is assumed to be granted:
 When business is carried out with knowledge and without the specific
opposition of the spouse who should provide it.
 When, on contracting marriage, one of the spouses is conducting
commerce and continue to do so without objection by the other.
o Personal property of the spouse: consent must be specifically provided in each
case. Consent must be recorded, for third party purposes, in a public deed
registered at the Business Registry.
In any case, the spouse may freely revoke the specific or assumed consent.
Liability of the sole trader. The limited liability entrepreneur.
A sole trader, as every legal or natural person, assumes unlimited liability for his acts
when carrying on business (1911 Civil Code), contractual liability (art. 1101 Cc) and civil
or tort liability for negligence (art. 1902 Cc.) (There is no distinction between “business
assets” and “personal or familiar assets”)
Since 1995, one-person companies are allowed by Spanish Law. In that way, a de facto
limitation of liability is available by means of forming a registered one-person company
limited by shares. Limited Liability Entrepreneur status can be taken on by an individual
entrepreneur, regardless of their business or professional activity, to limit their liability
for the debt deriving from business which will prevent any such debt from affecting their
principal residence under certain conditions.
(Created by Law 14/2013 of 27 September, support for entrepreneurs and
internationalization.)

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Law is an attempt to introduce measures that will revive the economy by promoting
what is now known as "entrepreneurship" (emprendimiento) and that is just the
business or professional activity exercised by natural or legal persons.
Chapter II include a new figure: the limited liability entrepreneur, with the intention,
expressed by the legislature in the explanatory memorandum, that individuals can avoid
liability for their business debts affecting their residence.
Requirements to acquire it:
1. It must be a physical person, legal age and free disposal of his assets. And he has to
develop a business or professional activity .

2. The main advantage you get by becoming an LLE (limited liability entrepreneur) is that

Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad.
you can limit your liability for the debts arising from your business or professional
activity as follows: .

a. The liability will not reach his residence, provided its value does not exceed
300,000 euros (450,000 in populations of more than 1,000,000 inhabitants).

b. This limitation does not apply to the debts of a public nature (tax and social
security), so basically it will apply to the debts of suppliers, since in case of bank debt,
surely the bank will require collateral mortgage or waiver of this limitation of liability.

3. In the case of public debts, if the LLE can prove the character of the residence, will
have certain advantages in its execution, although not excluding completely liability.
4. Those LLE who act with fraud or gross negligence in fulfilling their obligations are
excluded from this limitation of liability, provided that gross negligence or fraud is
declared by a final judgment.
5. Registration at the Mercantile Registry: he needs a public deed (escritura)
6. Registration at the Property Registry: the fact that the principal residence is not tied
to the professional activity must be registered at the Property Registry, too.
7. He has to formulate and, where appropriate, to audit annual financial statements in
accordance with the provisions for single-member limited liability companies.
(Unsuccessful system: only 51 in Spain during 2014. In 2016, only 12!!! Reason: there
are other ways to exclude the universal liability for business debts.)

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