President Fernández signed into law on December 11, 2008, a new company law (“Ley General de las Sociedades Comerciales y Empresas Individuales de Responsabilidad Limitada No. 479-08") which will revolutionize the way business is done in the Dominican Republic. The most important innovation brought about by the new statute is the creation of two new business entities: the “Sociedad de Responsabilidad Limitada or SRL” (Limited Liability Company or LLC) and the “Empresa individual de Responsabilidad Limitada or EIRL (Limited Liability Individual Business).
Here are the characteristics of the two new business entities
Limited Liability Company
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Based mostly on the current LLC’s in French Company Law with certain similarities with American LLC’s. |
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Chief company officer(s): one or various managers (“gerentes”). Must be individuals. |
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Minimum of two shareholders; maximum of 50. |
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RD$100,000 minimum capital. |
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Capital must be all paid up and deposited in a bank in order to be able to record company at Business Registry. |
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Shares not readily transferable. |
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Shareholders’ liability limited to their investment in the company. |
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Ideal for small or family businesses. |
Limited Liability Individual Business
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No shareholders; one sole individual owns the business. |
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Owner must be an individual, not a company. |
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Owner’s liability limited to his or her investment in the company |
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No minimum capital. |
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Chief Officer(s): the owner and the manager. The owner may be the manager. |
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Ideal for businesses owned by a single individual. |
The “Sociedad Anónima or S.A.,” currently the entity of choice of 99% of Dominican businesses, has been amended to make it the ideal vehicle for medium or large businesses.
Another innovation brought by the law is that it regulates public companies (“Sociedades Anónimas de Suscripción Pública”) setting an important milestone for capital markets in the Dominican Republic.
The new law will come into effect June 19, 2009.
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