In the following lines we will explain the most common types of companies, and which one suits us best depending on the projection and specific needs of our project.
The 4 most common types of companies are the Limited Liability Company or SRL , the Individual Limited Liability Company or EIRL, the Public Limited Company or SA , and the Joint Stock Company, better known as SpA .
Limited Liability Company
The SRL is regulated by Law No. 3,918 and additionally by the Commercial Code and Civil Code. It is a partnership, which means that a lot of importance is given to those who make it up, unlike SA or SpA, where the main thing is capital over trust, as we will see later.
The main characteristics of the SRL are the following:
It must be made up of at least 2 partners and cannot exceed 50.
The liability of the partners is limited to the amount of their respective contributions.
Its business or object may be any lawful activity, except the conduct of banking business.
Its administration may be entrusted to one or more partners, or even to a third party, who must be appointed unanimously.
The death of one of the partners does not affect its subsistence, unless expressly agreed in the statutes, continuing with the heirs of the deceased partner.
Given the personal nature of the company, the social rights or participation quotas cannot be freely transferred, requiring the consent of all the partners and a modification to the statutes.
Its partners may be natural or legal persons, national or foreign.
There is no minimum capital contribution.
Limited Liability Sole Proprietorship
The EIRL is regulated by Law No. 19,857. It is a sole proprietorship, so strictly speaking it does not correspond to a corporation. It is aimed at small business owners who want to separate their personal assets from those destined for commercial activity.
The main characteristics of the SRL are the following:
The EIRL is made up of only 1 natural person.
The liability of the holder is limited to the amount of his/her respective contributions.
Its corporate name must be the name of the owner accompanied by the letters EIRL.
Its business or purpose is always commercial, and it can carry out any lawful activity, australia number for whatsapp except those intended by law for SA, such as banking or insurance companies.
Its administration corresponds to the owner, although it can be delegated.
The owner may sell it as long as it is to another natural person, who will become the new owner of the company, and the corporate name or business name must be changed.
There is no minimum capital contribution.
Joint stock company
The SA is regulated by Law 18,046. It is a capital company, so, unlike what we saw regarding the SRL, the people who make it up are not relevant, and they are always commercial.
Public limited companies may be open, special or closed. They are open (SAA) if (i) they have more than 500 shareholders, or (ii) when at least 10% of the subscribed capital belongs to a minimum of 100 shareholders, or (iii) when their shares are registered in the securities registry. SAA are subject to supervision by the Financial Market Commission (CMF). Special companies are those that require authorization from the CMF for their existence, and are intended for specific lines of business, such as stock exchanges, insurance companies or fund managers, among others. They will be closed (SAC) in all other cases.
It must be made up of at least 2 partners. In the case of SACs, they may not exceed 500 partners. In the case of SAAs, there is no limit as to the maximum.
The liability of the partners is limited to the amount of their respective contributions.
Its business or object may be any profit-making activity that does not violate the law, morality, public order or state security.
Its administration is the responsibility of a Board of Directors (who appoints a manager) and a Shareholders' Meeting.
The rights of the partners are represented by shares, which can be freely transferred, unless there is a limitation by the shareholders.
Its capital is divided into shares of equal value.
There is a minimum capital required to establish them, which must be paid within 3 years of incorporation.
Its partners may be natural or legal persons, national or foreign.
Joint Stock Company
The Joint Stock Company (SpA) is regulated by article 424 and following of the Commercial Code, and additionally by the rules of the SA. Like the SA, it is a capital company that is characterized by being a company with a light and flexible structure in terms of its administration. In general, the SpA is the preferred social structure for entrepreneurs, since it is designed for venture capital companies, and they can incorporate new shareholders according to the needs of the company.
The main characteristics of the SA are the following:
It may be formed by a single partner, but may not exceed 500 shareholders.
The liability of the partners is limited to the amount of their respective contributions.
Its purpose or purpose may be any lucrative activity that does not violate the law, morality, public order or state security, except those intended by law for SA
Its administration is flexible and may be carried out by one or more partners, a third party, or a Board of Directors.
The rights of the partners are represented by shares, which can be freely transferred, unless there is a limitation by the shareholders.
Its capital is divided into shares of equal value.
Its shareholders may be natural or legal persons, national or foreign.