NewsWhore
02-20-2009, 03:20 PM
Dominican companies will undergo major structural changes this year under new Law 479-08. Companies with assets over RD$30 million are now the only ones allowed to retain the board hierarchy prevalent in the current sole business structure. New and more flexible models will be available as of June 2009 for small and medium-sized companies.
Milagros Puello, executive director of the Santo Domingo Chamber of Commerce, in charge of implementing the new law for businesses in the capital city, formally introduced the "radical changes in the way of doing business" at a workshop at the Hotel Santo Domingo yesterday.
Keynote speaker at the event was Jose Luis Taveras of Fermin Taveras, the Santiago lawyer who drafted the law that was approved in December 2008. Taveras says the new law was designed to facilitate business structures of small and medium-sized companies, which make up the bulk of companies in the DR. "We have had a mega-corporate structure in place for small companies," he told the audience at the Hotel Santo Domingo as he unraveled the contents of Dominican company law.
He said that the new law rules the structure of the companies, not the business. It replaces legislation that dated back to 1867. The new law is based on French legislation dating to 1985, but it is complemented by laws from Spain, Colombia, Uruguay, Argentina, Chile, Mexico and Germany, European Commission directives and local input to adapting the legislation to Dominican institutional reality.
In the past there was practically only one model for company formation, that of anonymous societies. Now there will be several to choose from.
"More than a simple law, we are dismantling an entire corporate culture," he said. But he warns there will be problems ahead because the original bill was mutilated and changed in Congress. "We have been given rice, beans and spaghetti," he said, while stressing that as with all things in the DR, it will find its own way as its use progresses.
"Now we can say we have minimum international company formation standards in place," he said.
The law was passed at the initiative of the National Competitiveness Council, CNC. Taveras says that manuals for the implementation will be available next month. Meanwhile, Milagros Puello announced that the Santo Domingo Chamber would be providing examples of company formation statutes for all the possible cases, as well as forms and other documents that will serve as models for Dominican companies.
The law establishes that companies with capital over RD$30 million need to "adjust" and apply for the new anonymous society model or the other models as of 1 April 2009 placing their requests to the Santo Domingo Chamber of Commerce through 10 June 2009. Companies under RD$30 million can choose from a portfolio of corporate instruments that adjust to the different sizes, nature and purpose of business and need to begin their "transformation" process as of 19 June 2009.
The new models that are expected to be the most used are the SRL that is the LLC, GmBH (Germany), Ltda (Venezuela), OOO (Russia), and the single-owner limited enterprise, the EIRL.
In the new SRL model, the shares of the company cannot be freely negotiated with a third party, and a minimum social capital of RD$100,000 is required, with no maximum start-up limit. The SRL is for a minimum of two partners and a maximum of fifty, and are seen as functional forms that do not require the figure of a board, as previously with the S.A. model. It is also more flexible because a mere signing of an agreement facilitates many actions that in the past required the enactment of a board. Setting up a company should take no more than eight days.
The EIRL, individual companies of limited responsibility are single-owner companies that operate in a corporate structure. There are no limits on capital. This model requires the owner to adopt a company name different from his or her own.
The good news is that the DGII has agreed that there will be no taxes on the formation of new companies in the new SRL and EIRL models.
The transformation to SRLs and EIRLs, and other models, is only effective as of June, when the stipulations for transition to the new status come into effect. Big companies are obliged to "adjust" their operations to the new ruling from now to June. But the only consequence for not transforming companies with less than RD$30 million in social capital is that the company's legal paperwork, including the required mercantile registration, will not be up-to-date. This document is required by banking institutions and other government-ruled commercial transactions.
In other parts of the country, the leading chambers of commerce have been entrusted with the implementation of the law in their communities.
See http://www.camarasantodomingo.org.do/
More... (http://www.dr1.com/index.html#8)
Milagros Puello, executive director of the Santo Domingo Chamber of Commerce, in charge of implementing the new law for businesses in the capital city, formally introduced the "radical changes in the way of doing business" at a workshop at the Hotel Santo Domingo yesterday.
Keynote speaker at the event was Jose Luis Taveras of Fermin Taveras, the Santiago lawyer who drafted the law that was approved in December 2008. Taveras says the new law was designed to facilitate business structures of small and medium-sized companies, which make up the bulk of companies in the DR. "We have had a mega-corporate structure in place for small companies," he told the audience at the Hotel Santo Domingo as he unraveled the contents of Dominican company law.
He said that the new law rules the structure of the companies, not the business. It replaces legislation that dated back to 1867. The new law is based on French legislation dating to 1985, but it is complemented by laws from Spain, Colombia, Uruguay, Argentina, Chile, Mexico and Germany, European Commission directives and local input to adapting the legislation to Dominican institutional reality.
In the past there was practically only one model for company formation, that of anonymous societies. Now there will be several to choose from.
"More than a simple law, we are dismantling an entire corporate culture," he said. But he warns there will be problems ahead because the original bill was mutilated and changed in Congress. "We have been given rice, beans and spaghetti," he said, while stressing that as with all things in the DR, it will find its own way as its use progresses.
"Now we can say we have minimum international company formation standards in place," he said.
The law was passed at the initiative of the National Competitiveness Council, CNC. Taveras says that manuals for the implementation will be available next month. Meanwhile, Milagros Puello announced that the Santo Domingo Chamber would be providing examples of company formation statutes for all the possible cases, as well as forms and other documents that will serve as models for Dominican companies.
The law establishes that companies with capital over RD$30 million need to "adjust" and apply for the new anonymous society model or the other models as of 1 April 2009 placing their requests to the Santo Domingo Chamber of Commerce through 10 June 2009. Companies under RD$30 million can choose from a portfolio of corporate instruments that adjust to the different sizes, nature and purpose of business and need to begin their "transformation" process as of 19 June 2009.
The new models that are expected to be the most used are the SRL that is the LLC, GmBH (Germany), Ltda (Venezuela), OOO (Russia), and the single-owner limited enterprise, the EIRL.
In the new SRL model, the shares of the company cannot be freely negotiated with a third party, and a minimum social capital of RD$100,000 is required, with no maximum start-up limit. The SRL is for a minimum of two partners and a maximum of fifty, and are seen as functional forms that do not require the figure of a board, as previously with the S.A. model. It is also more flexible because a mere signing of an agreement facilitates many actions that in the past required the enactment of a board. Setting up a company should take no more than eight days.
The EIRL, individual companies of limited responsibility are single-owner companies that operate in a corporate structure. There are no limits on capital. This model requires the owner to adopt a company name different from his or her own.
The good news is that the DGII has agreed that there will be no taxes on the formation of new companies in the new SRL and EIRL models.
The transformation to SRLs and EIRLs, and other models, is only effective as of June, when the stipulations for transition to the new status come into effect. Big companies are obliged to "adjust" their operations to the new ruling from now to June. But the only consequence for not transforming companies with less than RD$30 million in social capital is that the company's legal paperwork, including the required mercantile registration, will not be up-to-date. This document is required by banking institutions and other government-ruled commercial transactions.
In other parts of the country, the leading chambers of commerce have been entrusted with the implementation of the law in their communities.
See http://www.camarasantodomingo.org.do/
More... (http://www.dr1.com/index.html#8)