What are the differences between a public company created by law and state entity?
The fundamental difference between the two is that public companies created by law are legal persons under public law and are part of the organs of the State Administration, as provided for in paragraph 2 of Article 1 of Law N. 18,575, Organic Constitutional Law of General Bases of the State Administration, whose revised, coordinated and systematized text is contained in D.F.L. No. 1 of 2001, of the Ministry General Secretariat of the Presidency.
In this context, public companies created by law are subject to certain public law rules that govern the Administration, such as the rules governing the manner in which they may dispose of their assets, the obligation to report to the Financial Analysis Unit any suspicious transactions detected in the course of their activities, the probity rules of the aforementioned Law of Bases, and the administrative liability of their directors and employees, among others.
Meanwhile, state entities are legal companies under private law and are not governed by the rules applicable to the State Administration bodies.
They also differ in terms of the scope of application of the control of the Comptroller's Office. In the case of State corporations, such control is limited to ensuring compliance with the purposes of the company, the regularity of its operations, enforcing the responsibilities of its directors and employees, as well as obtaining the information necessary for the formulation of the national balance sheet (Article 16 of the Organic Law of the Contraloría General de la República).