What is a branch?

In most cases, companies have certain establishments, which have a dependency relationship with the different main headquarters (origin) and source from other branches. The branches were born as a result of business expansion, all with the aim of getting more customers or covering a larger market field. All of this produces a great territorial dispersion of business activity.

Branch characteristics

The branches are secondary establishments and must have a continuous activity, that is, it must have a permanent representation and a representative who is in charge of the management itself. But, this management must have a certain autonomy and it will also have to be able to develop all the activity that the main company's object entails.

A branch can be created both by both by individual entrepreneurs as by companies or other entities. Then, the name of the branch can be the same as the main establishment.

The activity of a branch is different from everything else. It lacks natural persons and has neither a true social capital nor a specific objective. But the company provides funds so that the branch can carry out activities that are entrusted to it. For the development of its activity, the main company usually appoints a main director of the branch, but never as its representative, since it lacks legal personality.

And how do you close a branch? The branch will be removed when ordered by the main establishment. It can be closed in two ways:

  • By own decision of the parent company.
  • Due to its termination.

All this journey will be carried out by the agencies that created the branch, unless otherwise established in the statutes. So the branches are independent bodies and without legal personality.

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