The Commercial-Civil Dichotomy of Business Organizations and Its Legal Significance under Ethiopian Law

Abstract

The classification of business organizations into commercial business
organizations and civil business organizations (also known as non-commercial business organizations) is traditionally maintained in
most civil law countries. The Ethiopian legal system, which maintains
distinct civil codes and commercial codes, also upholds the
classification of business organizations into commercial and civil
business organizations. With respect to this classification, a host of
issues remain blurred. What is the basis of the classification? Is the
basis of the classification clear cut? What are the legal consequences
of this classification? What legal frameworks do these categories of
business organizations share and where do they differ? Do we
necessarily need to sustain this dichotomy anymore? Has any
subsequent legislation affected the earlier legal framework of the
distinction in the Commercial Code of Ethiopia? These issues and
other related matters deserve critical consideration in the Ethiopian
context. Through analysis of these issues, this article concludes that
the civil-commercial dichotomy of business organizations is somewhat
old-fashioned, at least in some respects, and under Ethiopian law, it
has put civil business organizations at a disadvantage.