RESULTADOS Y DISCUSIÓN

Once the participation scheme is confi gured and developed for the project, the actors are defi ned and community interest is consolidated, communications channels are adopted between the different parts of the project, and the forestry development model for the region is approved. At this point, the need arises to create a legal representation capable of articulating and increasing the efforts of all regional players in order to generate alliances and consolidate the execution of the development model.

The need then arises to analyze the structure of the different forms of partnership and production to ensure transparent, democratic, and simultaneous participation of the public and private sectors, and of local communities. Current social dynamics are mainly focused on free association and this, in essence, is the right of individuals to manifest their wills through efforts, as well as material and immaterial goods, in a stable and permanent fashion to achieve common goals.

In a broad sense, association means the joining of two or more people that agree to join efforts towards common good, obliging each other to cooperate to achieve something, through a stable organization.

60 | Social and Legal Issues

1. Intersections of sectors

In theory, there is a clear way to classify the social structure of a territory such as a state, region, province, etc. This classifi cation is based on the analysis of the actors that carry out activities within this territory. In general, the organizational scheme within a territory where human populations live is formed by three sectors, namely: a) public or institutional; b) private or entrepreneurial; and c) community or social. These gather a heterogeneous group of actors, institutions, traditions, and have specifi c characteristics. The importance of this classifi cation cannot be overstressed and it is safe to state that the political trend of a territory is measured in terms of the size or infl uence of one of these sectors within the dynamics of the territory.

2. Partnership patterns

According to most current constitutional schemes, the public sector or government is responsible for covering the basic needs of society, within clear concepts of equality, fairness, solidarity, and justice, in particular for those who are disadvantaged in relation to the rest of the population. This, however, does not preclude communities from participating in government decision-making, planning and managing, or in monitoring accountability of civil servants and resource allocation. Within this context, local communities have maintained some patterns of partnership that have allowed for regional economic development and that can also allow for the implementation of clean development and environmental services projects.

These partnership patterns have the following functions:

• To encourage community building as a factor of respect, tolerance, coexistence, and solidarity in achieving peace, which requires reshuffl ing government practices and citizen education.

• To promote consensus, dialogue, and agreements as development strategies. • To validate planning as an instrument for development in communities.

• To increase capacity for management, self-management, and co-management in communities.

• To promote community education as a necessary instrument to recreate and add value to participation in local, regional, and national issues.

• To promote creation of grassroots organizations and community enterprises. There are also other types of management instruments developed around private initiatives, which could be catalogued as associations that may or may not be profi t-oriented. Among mechanisms for private management we fi nd ways of association that are used by an individual or community to overcome challenges imposed by market forces. A mere gathering of individuals to reach a common goal is not suffi cient to create the desired type of organization, since there should be a distinction between non-profi t associations and those formed for profi t. The latter refer to civil and commercial partnerships; the former to associations, foundations and NGOs in general. Profi t-riented partnerships can be commercial partnerships or civil associations; the difference between these is the activity carried out. Commercial partnerships are focused on economic objectives, while civil associations are aimed at achieving other kinds of objectives that differ from economic goals.

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a. Commercial partnerships

Commercial partnerships include three kinds of groups: partnerships of interested parties, partnerships by quotas and partnerships of shareholders

Partnerships of interested parties

Within these we fi nd collective partnerships and de facto partnerships:

Collective partnerships: The current legal context defi nes these as those that require a minimum of two partners; the maximum number of partners is not defi ned. Partner liability is always joint and unlimited although the legislation states that it is subsidiary. All industry investments are not specifi cally assessed in economic terms and are not part of the social capital. All partners are administrators, but can delegate this function upon one of them or a third party. In general this form of association is applied to small family-owned enterprises and the motive for association is dependent on the individuals that use it (Intuito Personae).

De facto partnerships: The current legal context defi nes these as those that, as their name specifi es, are not created through public documents. Similar to collective partnerships, they require a minimum of two partners and the maximum membership is undefi ned. Partner liability is joint and unlimited. Member participation is adjusted to the conditions agreed by the partners. This type of partnership corresponds to cottage industries, retail commerce, professional services, and arts and crafts.

Partnerships by quotas

These are divided into simple limited partnerships and limited liability partnerships: Simple limited partnerships: The current legal context defi nes these as those comprised, minimally, by a managing partner and a silent partner. Normally, the maximum number of partners may be undefi ned. Liability of managing partners is joined and unlimited and that of silent partners is limited to the amount of their investments. Normally the managing partner contributes industry or labor, and also manages and legally represents the partnership. Silent partners may only represent it as delegates of the managing partner. This form of partnership is applied, in many instances, to small family-owned companies.

Limited liability partnerships: The current legal context defi nes these as those with a minimum of two partners and a maximum of 25. Partner liability is limited to the amount of their investments, but some or all the partners may stipulate greater liability or supplementary warranties. The value of investment in industry is not assessed and is not part of the social capital. Partnership management and representation may be exercised by all the partners, but the board could delegate it to a manager. This form of partnership is used for small and medium-sized companies.

Partnerships of shareholders

These are divided into limited partnerships by shares and corporations:

Limited partnerships by shares: The current legal context defi nes these as those that require a minimum of six partners, a manager, and fi ve silent partners. The maximum number of partners is undefi ned. Partner liability is similar to that of simple limited partnerships. Contrary to other partnerships, the manager may free shares towards

62 | Social and Legal Issues

losses and profi ts. Partner liability in management is similar to that of simple limited partnerships. This form of partnership is used for medium-sized companies, generally of closed type.

Corporations: The current legal context defi nes these as those that require a minimum of fi ve partners and with and undefi ned maximum number of partners. Partner liability is limited to the amount of their investments. Those contributing industry may earn profi ts or free shares. Partners may be part of the board of directors or legal representatives or employees of the partnership. This form of association is used for large companies.

b. Non-profi t entities

Non-profi t entities are involved in many fi elds of human activity, often covering those functions that government is unable to provide. They do not pursue fi nancial profi t, attempting instead to benefi t society. Non-profi t entities generate enormous physical and moral profi t for those that receive their help, but with no pecuniary gains for their members or founding partners. Thus, the legal and tax treatment they receive is different to that aimed at profi t-oriented entities or commercial partnerships.

c. Associations

Associations are entities that emerge from the permanent joining of two or more members. Its altruistic ends may refer to the social conglomerate in general or to a sector of it, or may be aimed at encouraging, advocating and promoting the common interests of the members. Thus the fi eld of work for associations may refer to diverse ends such as, for instance, environment, education, cultural, recreational, charity, scientifi c or religious. Associations emerge as an agreement of wills, linked through contributions in money, kind or activity, towards an end. The single will, as a result of the merging of the individual wills of the associates, is one of the defi nitive features of associations, in contrast with other groups such as foundations. The will of the majority is the will of the association, and it defi nes the bylaws and fundamental decisions of the entity. Associations are autonomous in their creation and operation. Associations can renovate, modify, or dissolve by will of the majority of its members, as per their bylaws, which, in turn, are subject to reforms at any time by that same will. They do not require starting assets in order to operate and have the legal capability to buy goods and generate funds.

d. Cooperatives

These are companies formed as non-profi ts in which workers or users, as the case might be, are at the same time investors and managers of the company created in order to distribute or produce jointly and effi ciently goods or services to satisfy the needs of their members and of the community in general.

Cooperatives have, among others, the following features: • Member entry and exit are voluntary

• The number of members is variable and unlimited

• They operate based on the principle of democratic participation • They carry out continuing cooperative education

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• Their assets are variable and unlimited; however, bylaws should establish a minimum amount of social investments deductible during the lifetime of the cooperative. • They establish that social reserves and surpluses, in case of liquidation, are not

subject to distribution.

• The minimum number of founding members is twenty although legal exceptions may occur.

• Liability is limited for cooperatives. This means that member liability is restricted to the value of their investments and cooperative liability towards third parties is limited to its social assets.

• Cooperatives must register at the “Superintendencia de Economía Solidaria” the entity that controls and monitors the cooperative sector.

e. Foundations

Foundations are legal entities that emerge from private or public initiatives, allocating funds or goods towards an altruistic end stipulated in their incorporation. A donation is mandatory to create a foundation. This contribution may be in the form of money or any kind of goods. The document of incorporation should indicate the total amount of the said initial contribution. Also, the legal representative or the tax auditor should indicate, in writing, that the contribution was indeed made.

Foundations are not necessarily the product of agreeing wills, since only one will is suffi cient to create a foundation. Once the will is expressed, the means to realize it are allocated and the authorities offi cially recognize it, the entity does not require further manifestations of the will of the founder or founders to carry out and reach its objectives. The initial will is somewhat stratifi ed; the rest will be a matter of carrying it out and interpreting it through its own means. In terms of assets, it is worth noting that the founding act is directly linked to the donations, since the founder assigns the assets to the entity being created in a unilateral act of endowment.