CORRELATIONS EXISTING BETWEEN SHARE CAPITAL AND SOCIAL PATRIMONY

Abstract

What is social patrimony and what is its role in the existence and functioning of the company? Is there any connection between share capital and social patrimony? These are questions that we try to answer throughout this paper. Current research presented is based on a theoretical study of specific regulation and doctrine regarding the risk of insolvency for companies. Using critical research method we found various discrepancies in their implementation which in turn can lead to market distortions and to an increase in bankruptcies. Research conducted revealed us another question that we had to find an answer and that was: Can a certain society reach the brink of insolvency even if it has a well-established and reliable market with an impressive portfolio of customers who offers quality goods and services at a good price? Present research presented offers arguments, pros and cons to concluding a correct answer. This paper reflects upon the answer that the role of patrimonial balance to the society is vital. In order to achieve current research results present paper critically argues upon the definition of legal personality and how it relates to social patrimony. Through the effects of legal personality, each legal person acting on the market is liable for its obligations with its own goods. Deriving another fact from this situation is the fact that associates of a company are accountable for social liabilities in a "subsidiary, unlimited and joint" manner. Research goes further into analysing the causal link between the capability of the legal entity and its patrimony. Theoretical findings show that only those rights and obligations which are necessary to achieve the goal set bylaw or in the charter can be part of the companies` activity and capability of use. Also the functioning of a company implies the realization of its exercise capacity by the fact that it is able to hold rights and fulfil its obligations through its management appointed by the memorandum of association or bylaw. Research also presents the elements composing the social patrimony and these are social assets and social liabilities hold by a company and also the differences in nature regarding share capital comparing various incident regulations.

Keywords

• insolvency; dissolution; social assets; social liabilities; patrimony; share capital; legal personality;