Public utility

economic-dictionary

Public utility refers to that activity, good or service that is of benefit or collective interest, either for the citizens of a country or on a larger scale, for humanity as a whole.

Public utility is opposed to private utility in the sense that it does not seek the benefit of a small group of partners or shareholders, but rather focuses on benefiting a broad group of individuals. Many of these individuals have not made a specific contribution to the development of the activity or production of the good or service.

In any case, it must be borne in mind that there are many definitions. There is no single and general concept, but its central idea is the benefit of a wide sector of society.

Application of the concept of public utility

The concept of public utility applies to various situations such as:

  • Guide in the principles of Government
  • The construction of common use infrastructures
  • The expropriation of land (which must be used for other common uses)
  • The creation of organizations or entities that promote social welfare

Among the objectives pursued by public utility entities are: education, civic awareness, scientific development, culture, sports, health, promotion of constitutional values, promotion of human rights, development cooperation, protection of women, protection of children, protection of the environment, protection of equality and tolerance, consumer protection, etc.

Public utility entities in Spain

In Spain, entities can request to be declared of public utility. The foregoing entitles them to tax benefits and also gives them social recognition for their work.

Article 32 of Organic Law 1/2002, of March 22, regulating the Right of Association, defines the criteria and obligations for the declaration of public utility.

Requirements to be a public utility entity

The requirements that an entity must meet to obtain the declaration are the following:

  • Its statutes seek to promote the social interest.
  • Its activity is not limited to benefiting only its associates.
  • The members of the representative bodies who receive remuneration do not do so from public funds and subsidies.
  • Have the financial and human means to carry out their tasks.
  • They are constituted, registered in the corresponding Registry, in operation and in compliance with their statutory objectives.

Benefits of public utility entities

Among the benefits that entities can avail of are the following:

  • Enjoy tax exemptions and benefits
  • Free legal assistance
  • Make yourself known as such

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