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.