The free market and the development of commodity-money relations would inevitably lead to such a phenomenon as the emergence of legal entities. The once fantastic legal institution today has been so rapidly developed that it is impossible to even roughly calculate the scale of financial assets involved in legal entities. What are the existing legal entities, the concept, characteristics and types of organizations, as well as approaches to their definition in historical retrospective. About all this in our material.
What it is?
The concept and characteristics of an organization and a legal entity by science are defined differently. But the traditional concept, together with Russian legislation, establishes the following. Today, the existence of this legal institution cannot surprise anyone. But if you think about its nature, then few can clearly explain the essence of this phenomenon.
The Civil Code of the Russian Federation establishes that a legal entity - an organization that has its own property or financial assets (owned, operational management or economic management), can acquire legal property and personal non-property rights and bear obligations on its own behalf, and is also able to act as a plaintiff or defendant in a court.
The 48th article of the Civil Code of the Russian Federation establishes this concept, the signs of a legal entity follow from this definition.
Signs of a legal entity
Consideration of this definition in a smaller section is important for understanding the essence of this legal institution.
Signs of a legal entity are:
- Organizational unity.
- Availability of own property.
- Legal personality.
- The opportunity to speak in court.
The features of a legal entity also include the presence of its own name, expressed in registration data, logo and so on.
The absence of even one of them makes the organization a legal rudiment that is outside the legal field. The concept and characteristics of a legal entity can only be considered in combination and in interaction with each other.
Legal Entity Understanding
The science of jurisprudence did not come to a modern definition immediately. To date, there are several theories that consider the essence of this institution, based on the characteristics of a legal entity in law:
- A legal entity is an ideological fiction. It is believed that this is simply a product of public thought and the rule of law. It’s just that people agreed to create some kind of artificial entity that exists only in the imagination, so that there is something to attach financial rights and obligations to. This approach has long been advocated by the famous Friedrich Savigny and Bernhard Winscheid.
- Theory of interest. This approach implies that only the material needs of a limited circle of people are hidden behind the essence of a legal entity. Not necessarily the founders, although they too. In this case, top managers, end-users, and executives can be included in the list of people enjoying the benefits of a legal entity. Founder - Rudolf von Jering.
- Legal entity - property. At the head of this theory is a material approach to organization. It is proposed to understand it primarily as a complex consisting of movable and immovable property, as well as financial assets and other material values. The founder of this approach is Alois Brinz.
- Organization is the state. This theory gives a little conspiracy theories. Its supporters believe that the interests of the state are behind all organizations, and that all assets belong to senior officials. The main developer of this approach is the famous legal scholar S.I. Asknazia.
- Director Theory. A distinctive feature of this approach to understanding the characteristics of a legal entity is its identification with the personality of the director / leader / founder. That is, supporters of this theory put an equal sign between the company and its head.
- Theory of the collective. In the Soviet period, jurisprudence acquired such a strange appearance that one can only be surprised at how our state did not lose such a powerful industry as civil law. The generally accepted norm of that period was the theory of the collective. That is, the complete identification of the enterprise and the work collective. It was believed that all the fruits of production, as well as the property itself, belong to the workers who produce these benefits. This idea, of course, is utopian and absurd. It was realized only on campaign posters. In fact, the factories were ordinary state legal entities. The scientific substantiation of this approach is found in the works of A. V. Venediktov and S. N. Bratus, so that those interested can familiarize themselves with this near-legal epic in the fantasy genre.
Historical motivation for the emergence of legal entities
Why were the organizations invented? On the market, individual people agree on something, the financial sector continues to move thanks to the activities of individual professionals. Why combine them into single collectives with separate property? To some this question may seem strange, but so far no one has a clear answer to it. Let's consider in more detail:
- One of the main features of a legal entity is the presence of its own (separate) property. By it are meant both tangible objects and other assets of enterprises. The formation of large authorized capital by attracting financial resources of several people gave a rapid leap to the market and helped realize the ambitions of entrepreneurs of the past.
- A sign of a legal entity, as we know, is the ability to exercise rights, create obligations and bear responsibility, as well as independently act as a plaintiff and defendant in court. It is believed that a legal entity has become a kind of way to protect the financial assets of individual individuals. By creating a legal entity, you are responsible only within the authorized capital and no more. If the company goes bankrupt, no one will take a penny of personal funds from you.
It is important to understand that the first legal entity appeared at the time of the emergence of the first state. In essence, this is the same fiction as any limited liability company, and its understanding just as much depends on the approach that an individual civilist takes for truth.
Types of legal entities
If to be completely objective, then the classification of legal entities can be made on the basis of absolutely any criterion:
- The main objective of the activity. Depending on whether the legal entity pursues the goal of achieving financial benefits or not, commercial and non-commercial legal entities are singled out.
- On what basis does the specified organization own its property. A legal entity may own property on the basis of: ownership rights (this option is common for private companies); operational management, economic management (legal entity, the founders of which is the state, own their property precisely on the basis of these forms).
- The classification provided for in the Civil Code of the Russian Federation. The law distinguishes the following types of legal entities: business entities; production cooperatives and peasant farms; enterprises established by the state or municipalities.
Nonprofit legal entities
Organizations that do not consider receiving financial profit as the main goal of their existence are called non-profit and are provided for by both the Civil Code of the Russian Federation and a separate federal law.
Their complete list is provided by the legislator. This vault is closed and wide enough. No one forbids citizens to establish a non-profit legal entity specialized for any specific needs.
Types of Nonprofit Legal Entities
A complete list of these organizations is established by the Civil Code of the Russian Federation, which divides them into two types: corporate and unitary.
Let's touch on each variety in more detail.
- Corporations. Here, the corporate criterion is the main criterion. These include consumer cooperatives (citizens unite to conduct joint farming, repair roads, garage services, etc.), public organizations (this includes movements based on certain beliefs, political parties, and much more; even parental committees can be included, but very conditionally ), associations and unions, Homeowners Associations (organizations managing common property), Cossack societies (historical and theatrical associations) and indigenous communities (distributed to the Territory it North).
- Unitary. The main criterion is the unity of the organization and the unity of management. This list includes various charitable and public foundations of any orientation, as well as religious associations (churches of absolutely all denominations), public law companies, autonomous non-profit organizations.
Implications for the legal system
The emergence of organizations has become one of the most important events in the formation of global legal thought. An analysis of the characteristics of legal entities allowed the formation of the most sensible understanding of their nature, which allowed the emergence of laws that correctly regulate their activities.
Is legal corporate science waiting for a new rethinking? We only have to find out.