Characteristics of the natural and legal person in Ecuador

In the complex Ecuadorian legal understanding, the notion of person is broken down into two fundamental forms: the natural person and the legal person. Each of these entities plays a crucial role in the country's socio-economic structure; understanding their distinctive characteristics is essential for those who seek to operate within the Ecuadorian legal framework. In this article, we will delve into the world of natural and legal persons in Ecuador. We will explore their fundamental definitions, rights, obligations and differences. From the inherent rights of an individual to the complexities of a legally constituted entity, we'll examine how these two forms of legal existence shape daily life and business in the country. Automate your company's accounting in minutes with Mobilvendor. Get to know everything hereAccounting system accounting automationMobilVendor Accounting ModuleContents hide 1 What is a natural and legal person? 2 Characteristics of natural and legal persons3 Obligations of natural and legal persons3.1 Obligations of Natural Persons3.2 Obligations of Legal Entities4 Regulations governing natural and legal persons in Ecuador4.1 Regulations for Natural Persons:4.2 Regulations for Legal Entities: What is a natural and legal person? Natural Person: A natural person refers to an individual that exists as a single, independent entity, endowed with rights and obligations. This figure includes Ecuadorian citizens and foreigners residing in the country, being recognized by law with their own identity. The natural person exercises fundamental rights such as freedom, property and integrity, and is subject to civil and legal liabilities derived from their actions. Legal Person: On the other hand, a legal entity in Ecuador represents an entity made up of individuals or capital, legally constituted to achieve specific objectives. This can take the form of companies, associations, foundations or other structures recognized by law. Unlike the natural person, the legal person has an independent existence, with its own rights and duties. Its creation and operation are regulated by specific regulations that seek to establish a clear legal framework for its operation. Importance of Differentiating: Differentiating between natural and legal persons is essential in the Ecuadorian legal and economic context. This distinction is relevant in various aspects, from taxation to legal liability. Natural persons can be holders of fundamental rights, while legal persons act as independent entities that facilitate the management of businesses, social projects or specific activities. Characteristics of natural and legal persons. In Ecuador, natural persons, whether citizens or residents, have rights and obligations under the Civil Code. On the other hand, legal entities, such as companies and foundations, are governed by laws such as the Commercial Code and the Companies Act. This summary addresses the essential characteristics of both, highlighting their legal framework and their specific responsibilities for a quick and clear understanding. Obligations of natural and legal persons. Below, we will detail separately what are the obligations of a natural person and a legal person.Obligations of natural personsNatural persons in Ecuador, whether citizens or foreign residents, are subject to various obligations established by the country's legislation. Some of the most important responsibilities include:Payment of Personal Taxes: Individuals must comply with their tax obligations, filing returns and paying taxes on income, property or other financial transactions, as appropriate. Respect for Labor Regulations: In case of employment, citizens must comply with labor laws, which regulate aspects such as working hours, fair compensation, and safe and healthy conditions in the workplace.Civil and Family Duties: Natural persons are required to comply with civil duties, such as respect for contracts, family obligations and compliance with legal provisions related to marriage, divorce, and parental authority, among others. Compliance with Environmental Regulations: Within the framework of growing environmental awareness, natural persons are expected to respect and comply with environmental regulations to contribute to the sustainability of the environment.Obligations of Legal Entities Legal entities in Ecuador, such as companies, foundations or associations, have obligations specific ones that go beyond individual responsibilities. Among the most relevant obligations are:Registration and Compliance with Legal Formalities: Legal entities must register properly according to the nature of their entity and comply with legal requirements, such as filing financial statements and renewing registrations.Payment of Corporate Taxes: Business entities are subject to the payment of corporate taxes, including income taxes and other charges specific to the type of entity.Compliance with Labor Regulations and Social Security: Companies must respect labor laws and ensure the well-being of their employees, complying with social security requirements and providing a safe work environment.Environmental and Social Responsibility: Legal entities also have the responsibility to comply with environmental regulations and contribute to social initiatives that promote community welfare.Regulations that govern natural and legal persons in EcuadorIn Ecuador, natural and legal persons are regulated by a variety of laws and regulations that establish their rights, obligations and responsibilities. Below are some of the key regulations that govern these entities:Regulations for Natural Persons:Civil Code: This legal body establishes the fundamental provisions that regulate the legal capacity of natural persons, as well as their civil, family and property rights and obligations. Comprehensive Organic Criminal Code (COIP): Defines and punishes criminal conduct, establishing the criminal liability of natural persons in cases of offences.Internal Tax Regime Act: Establishes the tax obligations of individuals, including the filing of income tax returns and other taxes.Labor Code: Regulates labor relations between employers and employees, establishing rights and duties for both parts.Human Mobility Act: Defines the rules and rights related to the mobility of people, including aspects such as migration, asylum and shelter.Regulations for Legal Entities: Organic Code of Production, Trade and Investment (COPCI): Establishes the rules that govern the creation and operation of companies, as well as incentives and obligations for the productive sector.Organic Code of Planning and Public Finance: Regulates economic and financial aspects, including corporate tax liabilities.Organic Law on Public Companies: Defines the legal framework for the creation and management of companies in the public sector.Companies Act: Establishes the rules for the creation, operation and dissolution of commercial companies and other forms of legal entities.Organic Law of the National Public Procurement System: Regulates public procurement processes, applicable to government entities and legal entities that participate in these processes. It is essential that natural and legal persons in Ecuador know and comply with these regulations, since this not only guarantees their operation within a solid legal framework, but also contributes to the orderly and sustainable development of the country.