In this issue we will follow up on the issue of registration of Limited Companies (S.A.) and Limited Liability Companies (S.R.L. or LTDA.), Explaining the legal information and requirements to register a company that interested parties must submit to the Costa Rican National Registry.

Number of partners as requirements to register a company

For both Corporations and Limited liability companies, at least two founding partners are required; but once the company is established, one of them can transfer a 100 percent of the shares or quotas to the other or to third parties.

It means that, both Legal Corporations can remain –without any problem- with only a single partner.

Members of the corporation as requirements to register a company

If you want to create a “Sociedad Anónima” or corporation, you must consider that it will need a Board of Directors with at least three members: President, Secretary and Treasurer, and also a Comptroller who doesn´t have power over the society.

Meanwhile, the “Sociedades de Responsabilidad Limitada” only need aManager.

Using a legal identity instead of a name

In Costa Rica it is not necessary to give the companies a social denomination (name), in order to identify them, for it can be replaced by just using the legal identification number or “cédula jurídica”.

If the corportation requires a name, it is recommended that at the time of registration the partnersprovide two or three different names, so that the Public Notary can do a research at the National Registry to find out if they are already in use, or if they are similar to others already recorded, situation that will hold back the inscription.

An address to be served

Another requirement to create an S.A. or an S.R.L. is to have a permanent domicile or office, in order to receive notifications.

The legal address should be located within the Costa Rican territory.

Term of the Corporation as requirements to register a company

The so-called ‘Plazo Social’ can range from 1 to 99 years maximum.

Usually the corporation is registered with the maximum term in order to prevent its expiration during the execution of its commercial activity, which will force the partners to celebrate an Assembly extending it for another period of time.

Distribution of shares

The total capital of the society must be specified, as well as the value of each share (S.A.) and quota(S.R.L.) and how they will be distributed among the partners and quota holders.

Registration expenses for incorporation

Applicants should considered that when they proceed to register a corporation, the National Registry stipulates the cancellation in advance of the tax on legal corporations, as well as other taxes and stamps whose value changes every year.

The failure to pay the tax on legal corporations, will allow the Registry not to perform any procedures.

The purpose of the corporation

It is required to specify which activity (or activities) the corporation will perform. The recommendation is to use a general clause with all the commercial possibilities available. Why? To prevent unnecessary reforms by laws in case the corporation changes its activities or adds new ones.

Requirements for partners, quota holders, managers or members of the Board o Directors

The S.A. and S.R.L. may be established by foreigners, whether they have their home address in Costa Rica or in their country of origin. In this last case, they must designate a resident agent,whichis a lawyer with an office in Costa Rica and whose function will be to receive notifications on behalf of the corporation.

The Registry requests foreigners and Costa Rican members of the corporations, the following documents and information:

• Full name
• A copy of the identification card
• Marital status
• Profession or occupation
• Home address.

If you’re thinking about creating an S.A. or S.R.L. please contact ERP Lawyers & Associates;we have experts that will help you record the corporation before the National Registry.

We also invite you to learn about the rest of legal services available at our firm.