1
Jun

One of the novelties that came with Law No.479-08 on Commercial Companies and Single Member Limited Liability Companies in the Dominican Republic, is that Limited Liability companies are now known for having a Sole Owner or Sole Partner; these companies are usually referred to as “EIRL” in the country.

We have previously provided information regarding other types of companies and corporations in the Dominican Republic, such as:

• Limited Liability Companies

• Simplified Public Limited Companies

• Public Limited Companies

We will be referring to instances in which it is viable to establish a Company or Corporation in the Dominican Republic formed by a single person; in these cases, the only possible option would be a  Single Member Limited Liability Company.

Important features of Single Member Limited Liability Companies (SMLLC)

1. Single Member Limited Liability Companies are owned by a natural person.
2. It is an entity endowed of its own legal personality, with the capacity to carry rights and obligations, which form an independent patrimony, separated from the other assets of the natural person who owns said company.
3. Legal persons cannot establish or acquire companies of this nature.
4. Individual Limited Liability Companies may be converted into a partnership.
5. They are able to perform all kinds of civil and commercial activities and provision of services, as well as industrial and commercial activities.

When considering this type of company, for us the vision of the legislator was based on two important factors:

• Anyone who has an informal business can have an identification and with it, they can formalize their business, in order to be able to comply with tax obligations, report to their employees and obtain a better financial presence.
• For the prevention and protection of assets, owned by individuals who manage their business with their identity card or passport, we would like to remind you that you commit all your assets when carrying out this type of activity, in case of financial and legal difficulties.

Therefore, this type of company is highly recommended for people who do not want to have a partnership, and are able to be sole owners and partners of the company in question.Please note that the other types of companies established in our legislation, are required to have at least two (2) partners or shareholders. If you would like more information about the different types of companies, you can click HERE.

We would like to point out the following:

-This type of company can be used for any corporate purpose, in other words, the fact that it has a single owner does not prevent it from carrying out various commercial activities, with the exception of some limited corporate objects. One example of these objects is Financial Intermediation, where only Corporations can be granted licenses for these purposes, as per regulations established by the Superintendency of Banks of the Dominican Republic.

-It can be used to obtain Residence by Investment in the Dominican Republic.In other words, these types of companies may have the required contribution of USD$ 200,000.00, in case they consider obtaining Dominican Residence and Nationality, by means of the aforementioned investment.

Having said this, we would like to highlight the novelty of the General Law of Commercial Companies and Individual Companies with Limited Liability, No.479-08, when establishing this type of company which only requires one (1) single person. Prior to this law, there was no such thing, on the contrary, a large number of partners were required to establish any type of company.

Requirements to establish a sole proprietorship in the Dominican Republic

• Company name
• Identity Document of the owner, which would be a cédula or Passport (if they are foreign nationals). Please note that a foreigner can own a company of this type, and they can also be partners of any other type of company in the Dominican Republic. To learn more, you may access our article about this topic, in the following link:

–      Steps to establish a Company in the Dominican Republic as a Foreigner

–      Can foreign nationals in the Dominican Republic be the partners of a company, branch or partnership?

• Purpose of the company
• Copy of Trade Name Registration
• Registered office, physical address of the company
• Bank receipt of the deposit in favor of the company being established (if applicable, given that if it is a contribution in nature it is not necessary).This requirement is the most difficult to comply with while establishing this type of Company; WHY?

For this requirement, the first thing that the party interested in establishing a company must do, is to open a bank account in Dominican Republic under their name, with the capital that will be allocated for the company. This specific requirement is exclusive to this type of company.

These are the main features and requirements of Single Member Limited Liability Companies. To learn more about this type of company, we invite you to contact us, through one of the communication channels we have available HERE.

At our law firm Morillo Suriel – Attorneys at Law, we have a division specialized in Corporate and Business Law in the Dominican Republic. Through that division, we can assist you with any questions or concerns you may have regarding Single Member Limited liability companies in the Dominican Republic or any other Corporate and Business matters in the country. Our attorneys are available to assist you regardless of your location; in Santo Domingo, Dominican Republic and the rest of world.