In the previous article, we provided information regarding the costs associated with the establishment of new foreign companies in the Dominican Republic. If you are interested in establishing and developing a foreign company or branch in the Dominican Republic, we will provide further details below on the types of companies available in the country.

Commercial Companies according to the Law of Commercial Companies (Law number 479-08) in the Dominican Republic

Now we will provide more information about the most significant of these types, given that they are the most practical and common:

1. Single Member Limited Liability Company (SMLLC).

Single Member Limited Liability Companies (SMLLC) are widely used in the country, mainly due to the fact that they are companies that have a sole owner. Additionally, they are established with independent patrimony, which is separated from the other assets owned by an individual considered to be a natural person.

Main elements of this type of company

• Its company name must be followed by the word “Single Member Limited Liability Company”, or the initials “SMLLC”
• It is owned by a natural person.
• It is an entity with its own legal personality.
• The contributions made by its owner can be made in cash or in nature.
• It is constituted by an act granted by its founder.
• There is no minimum amount of share capital.
• The attribution of power of direction for this type of company is granted to a Manager who must be a natural person.
• You will be able to carry out civil and commercial operations.
• The owner may designate a manager or take on the functions of a manager.

Requirements for the creation of an Single Member Limited Liability Company (SMLLC)

In addition to the requirements established at the end of this article, you will also need:

• Draft the articles of incorporation, legalized by a notary.
• Make the payment and keep proof of the contribution deposit, issued by the corresponding bank.
• Photocopy of your Dominican ID (known in Spanish as cédula).

Benefits of creating an Single Member Limited Liability Company (SMLLC)

• Having a partner is not required.
• You separate your own assets from the assets of the company.

2. Simplified Public Limited Company

Simplified Public Limited Companies are comprised by two or more people, who will only be responsible for the amount of their contributions.

The main benefit of Simplified Public Limited Companies is their contractual freedom, through which shareholders can freely establish everything pertinent to the company in the Bylaws, as well as the rules needed to make the company operational.

Main elements of this type of company

• You must have a minimum of two partners and there is no maximum limit of partners.
• The company name (trade name) will be freely formed, adding “Simplified Public Limited Company” or its acronym.
• Its authorized share capital may not be less than RD$3,000,000.00.
• The capital is divided into shares.
• At least 10% of the share capital must be subscribed and paid at the time of the formation of the company.
• Administrators do not necessarily need to be natural persons.
• The bylaws freely determine the management structure of the company, which may consist of one or more administrators or a board of directors.
• The appointment of one or more account commissioners to supervise the administration’s management is not mandatory.

Requirements for the Constitution of a Simplified Public Limited Company

• Power of attorney from the person who represents the company, to the person who is going to process the Commercial Registry application.
• Bylaws, in a private act (a minimum of 2 originals) or authentic, which must be submitted in the Commercial Registry.
• Proof of subscription (in case of subscription of cash shares), which must be signed by the founder(s).
• Original report of commissioner contribution (if applicable), which must be an authorized public accountant or appraiser, registered at the Institute of Dominican Appraisers or at the Superintendency of Banks or Insurance.
• Receipt of tax payment for incorporation of companies (1% of the authorized capital).
• Photocopies of identity card for Dominicans citizens and passport for foreign nationals.

Benefits of creating a Simplified Public Limited Company

• Autonomy to freely stipulate the policies of the company.
• Liability is limited.
• Its creation is simple, given that it can be created using a private document.

3. Limited Liability Company (LLC)

A Limited Liability Company (LLC), can be defined as a commercial company in which liability is limited to the capital contributed. As a result, in the event the company generates debts, the personal assets of the partners will not be affected. This feature is the main reason why this type of company is widely used in the country.

Features of a Limited Liability Company (LLC)

• The name of the company must be preceded or followed by “Limited Liability Company”, or the initials “LLC”.
• It is limited to a minimum of 2 partners and a maximum of 50.
• The partners of LLCs can be natural or legal persons.
• It is always commercial in nature.
• You may carry out civil and commercial operations, except those reserved by law for Public Limited Companies, e.g. banks and insurance companies.
• Its administration is in the hands of the Manager(s), who represent the LLC judicially or otherwise, with all the pertinent powers of administration and disposition.

Requirements for the establishment of a Limited Liability Company (LLC)

In addition to the requirements established at the end of this article, you will also need to do the following:

• Payment of the 1% capital tax.
• Drafting and signing of the constituent documents.
• Submit documents in the corresponding entities.

Benefits of establishing a Limited Liability Company (LLC)

• When it comes to corporate debts, partner liability is limited to capital contributions.
• The minimum share capital is very low, since it is only RD$100,000.00.
• There is no maximum capital.
• There is no minimum or maximum percentage of capital per shareholder.
• Establishing a new identity is allowed, which makes it easier for a company to raise capital and finance itself, compared to how it would be with a natural person.

Additionally, there are other types of companies available in the country

Public Limited Company

The Commercial Companies Law, in article 154, defines Public Limited Companies as the type of company in which there are two or more people under a company name, and is comprised exclusively by shareholders whose liability for losses is limited to their contributions.

Something very important to keep in mind when it comes to this type of company, is that there are two (2) types of Public Limited Companies: Publicly Owned Public Limited Companies and Privately Owned Public Limited Companies.

General Partnership

This type of company is comprised of two or more partners, who undertake a joint obligation with the company’s liabilities.

Article 59 of the Law of Commercial Companies, defines this type of company as follows:

It is the type of company that operates under a corporate name, in which all the partners are considered traders and meet their social obligations in a subsidiary, unlimited and socially responsible manner.

Some of the features of this type of company are the following:

• The company’s creditors will be able to pursue the payment of social debts against an associate, only after they have put the company in default due to an extrajudicial act.
• The name must consist of the name of one or more associates followed by “and Company” or its abbreviation, if it does not include the names of all the partners.
• Must have a minimum of two (2) partners.
• The capital of this company will be established in the bylaws.
• An External Auditor is not mandatory.
• All partners will be managers, unless otherwise stipulated in the statutes.
• The parts or shares of this company are not transferable without the consent of the other partners.

Limited partnership

These companies have two different types of partners: general partners, with joint liability of the company’s commitments and limited partners, with liability limited to the amount of their contribution.

Partnership Limited by Shares

It is a type of company in which one or more General Partners are jointly liable for social obligations and one or more Limited Partners with liability limited to the amount of the shares they have subscribed, like the shareholders of a stock company.

In this type of company, the capital stock will be divided into shares. Additionally, the number of limited partners may not be less than three (3).