In Costa Rica there are different types of companies or of Legal Corporations to develop commercial activities or investments, and on this blog we will talk about the features and differences between the two most commonly used: the “Sociedad Anónima” (S.A. or Corporation) and the “Sociedad de Responsabilidad Limitada” (S.R.L., LTDA or Limited Liability Company).

Both are ideal to protect at a 100 percent, the personal capital of its members. It means that, in case of debts, legal situations or embargo, the contributed capital will be the only one responding.

The number of the members makes the difference

The first difference between different types of companies, the S.A. and S.R.L. has to do with its conformation. The “Sociedad Anónima” -ideal for big companies- needs at least two founding partners and a Board of Directors of at least three members, which could act as President, Secretary and Treasurer, plus a Comptroller who will not have any power within the legal society.

Meanwhile in the S.R.L. the structure of the legal company is much simpler and only requires, in addition of the two founding partners, a single Manager, that will serve as the legal representative of the Corporation; that´s why this kind of society it´s recommended for small and medium companies.

Partners and quota holders: a different way of naming the members of the societies

Regarding the equity, in the S.A. it is represented by shares and in the S.R.L. by quotas.

On this issue it is important to emphasize that the members of the “Sociedades Anónimas” transfer the shares by endorsement, but in the “Sociedades de Responsabilidad Limitada”, the quotas may only be transferred by means of a Transfer Agreement.

How to keep the records there different types of companies?

The S.A. must keep three books for keeping the records: The Board´s Acts and the General Assembly Acts, as well as a Register of Shareholders.

The S.R.L. writes its movements in the Quota Holders Register and the Assembly of Quota Holders Act.

In our next blog we´ll explain the legal requirements to conform a legal corporation, either a S.A. or an S.R.L.

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