10
Nov

General act 479-08 is the Law for Commercial corporations and Individual Limited Liability Companies and its modifications. This law regulates the types and features of companies and corporations in the Dominican Republic, in addition to regulations for Simplified Public Limited Companies, which are one of the options for corporate transport in the country.

In other articles, we have elaborated on the various business organizations, with the line of corporate types and which type of company should be constituted in each case, for example:

Types of business organizations and corporations available in the Dominican Republic

Which business organization type should you establish in the Dominican Republic

For you to decide which type of business organization you should establish or determine which option fits your needs, we suggest the following:

• How to determine the initial size of the company (small, medium or large)?
• What is its business purpose?
• What is the amount of capital you wish to allocate?
• How many partners or shareholders will take part in it?

By asking the aforementioned questions, you can easily identify the type of organization that best suits your needs.

The most common type of corporations in the Dominican Republic are Limited Liability Companies (LLC). Its ubiquity is a result of its benefits and simplicity. However, this will not always be the option that fits your:

1. Business need.
2. Business Purpose.
3. Social Capital.
4. Structure.
5. Among other factors.

As stated previously, the purpose of this article is to help those interested in ensuring that a Simplified Public Limited Company would be the type of organization that fits their needs, specifying its characteristics, requirements and providing further details.

We always advise our clients that Simplified Limited Companies are technically hybrids of Limited Liability Companies and Public Limited Companies. They are more systematic than LLCs and seem more abstract than a Public Limited Company. In a different article, we will elaborate on its requirements and when a Public Limited Company is your only option as a corporate vehicle in the Dominican Republic.

This type of organization is very different than how it was when it emerged in France. We will explain how it remains under the guidelines and creation of our legislation, even if it came from that initial basis; focusing on more practical issues instead of providing more information about its conception. Why consider a Simplified Public Limited Company?

  Let’s talk about its features:

• It is a type of commercial corporation in which the partners are only responsible of up to the amount of their respective contributions and are able to issue shares and other securities.
• A minimum authorized capital of three million Dominican pesos and the contribution of at least 10% of said authorized capital is required.
• A minimum of two shareholders is required.
• In principle, its regulations will freely determine the organic structure of the company and other rules governing its operation.
• They do not require a statutory auditor except in the event that private debt securities are issued.

Explanatory note: Its social regulations will freely determine the structure and operation of these corporations. That same law establishes certain mandatory rules consisting of:

1. The protection of minority partners.
2. The protection of shareholders’ right of equality.
3. Those relating to the preservation of creditors’ rights.
4. They may only issue registered shares.
5. For tax purposes, they will be regulated by the same rules applicable to other types of corporations.

To conclude and address the title of this article, why constitute a Simplified Public Limited Company in the Dominican Republic? To summarize:

• It is a type of organization with a greater presence than a LLC.
• The corporate legal structure is not very stringent, but may vary according to your interests.
• Greater efficiency.
• Lessening of formalities and the adaptation of structures in the functions of the company.

In our Morillo Suriel Attorneys at Law firm, we have a division specialized in Corporate and Business Law in the Dominican Republic. Through that division, we can assist you with any inquiry you might have in the matter.