|Ricardo A Pellerano|
The General Law on Companies No 479-08 was recently amended by Law No 31-11. One of the most important amendments to this Law was the creation of a new corporate structure available to business enterprises in the country, the simplified share company, or simplified corporation.
For simplified corporations, some of the legal requirements of Law 479-08 do not apply in order to make their organisational structure more flexible for smaller-sized businesses. For example, authorised corporate capital requirements are much lower than for regular corporations.
Simplified share companies do not require the existence of a board of directors or even the appointment of a vigilance officer, who is an officer in charge of overseeing management on behalf of the minority shareholders. Generally, the shareholders will decide what type of management structure best suits their business and provide for it in the bylaws.
In terms of share ownership and transfer requirements, the law stipulates that simplified corporations can only issue registered shares, which can only be transferred by a transfer statement registered in the books of the company. Simplified corporations can not issue bearer shares or shares to the order of the shareholder.
The law also provides that rules related to the protection of minority shareholders; on equal rights of the shareholders and the preservation of the rights of creditors, as well as penal provisions contained in the law, apply to simplified corporations.
Ricardo A Pellerano
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