Every entrepreneur who wants to start a new business has to face the concept and the foundation that creates a great difference between social contract and statute. It's part of the job.
After all, they are different, albeit similar, ideas. And the presentation of the specific document for your business is required when founding a company.
To help in this step that tends to tie a knot in the entrepreneur – especially those of the first trip -, we prepared this post! Follow with the reading below and understand all about the difference between social contract and statute!
What is the difference between social contract and statute?
THE The difference between the social contract and the bylaws is as follows:
THE statute it is used as a necessary constituent for public limited companies (SA), cooperative societies, limited partnerships and non-profit entities.
While the social contract is required for companies that have Sociedade Limitada (LTDA); or Individual Limited Liability Entrepreneur (EIRELI).
But that is just the tip of what each one means and, especially, the difference between social contract and statute.
The social contract
The social contract is seen as a business in which an agreement is signed between two or more people, which can be legal or physical, focusing on the constitution of a company – simple or entrepreneurial.
Thus, this document can serve as the representative illustration of a company style=”font-weight: 400;”> which will contain some basic data such as:
- the qualification of the partners;
- the address of the business in question;
- the duties of each;
- the industry.
Among other relevant information. It is also worth noting that UK residents for-profit (and non-anonymous) companies must prepare their respective social contracts.
Information from a social contract
From the following information, it is easier to distinguish the difference between social contract and statute:
- the qualification of the partners, discriminating them from basic data according to the item I of art. 997– remembering that there are distinctions if one or more partners is an individual and / or legal person;
- qualification of the company, whose item II of the same art. 997 reports the necessary data, such as the name of the company, its corporate purpose, the place where the company is headquartered and also its term of operation;
- the capital of the company (it appears in item III of art. 997), which must be exposed and explained in the currency – and which extends to the monetary value, exclusively, also pointing out any kind of assets (they must be susceptible to a pecuniary evaluation, however);
- the participation of each partner, detailing the operation of this company according to the participation according to the amount invested by each one of them;
- the list of administrators, which punctuates the company's hierarchy with its majority shareholder and other distinctions;
- profit and loss sharing style=”font-weight: 400;”>, which consists of cohesive participation according to the respective shares of the partners;
- the responsibility of the partners, which must specify to which these partners respond – or not – in the exercise of their work.
In addition, all kinds of rules for more meaningful deliberations must be included in the articles of association. This all helps to keep the entire structure of society more enlightened and less likely to create problems and unforeseen circumstances among those present.
It is worth remembering that the social contract can be an element that demands more attention and care when researching the subject.
So, if you want to know more about this type of document, we have a complete post that explains what is social contract. Take a look, as soon as you finish this reading!
Now, through the characteristics of this type of document, we will better understand the difference between social contract and statute according to their importance.
This is because in the case of the bylaws, the following information must be included:
- the qualification of society, exposing its denomination according to art. 3rd of the S / As Law it's the art. 1,160 of the Civil Code, with the duration term and also the headquarters;
- the definition of the corporate purpose it must also exist, explaining the activities and solutions developed;
- the capital of the company, paying attention to the type of shares (common, preferred or fruition), the class of shares, their respective characteristics (with or without par value) and convertibility – if any. And the values must be expressed in the local currency;
- management assignments, exposing the limits of each member;
- the functioning of the Fiscal Council – a body that must be developed so that the definition of rules is maintained. This council may have permanent members or not, and respond to an amount that varies from 3 to 5 people.
So, there are clear ways to understand what is the difference between social contract and statute, as well as the direction of each of these documents, right?
After all, we are talking about documents that value formality for the consolidation of corporate legal relations.
As each one has its respective characteristics and forms of elaboration and maintenance, it is worthwhile to deeply understand the difference between social contract and statute.
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