Corporate Law at Chile
Sure! Here’s a clear overview of Corporate Law in Chile:
Corporate Law in Chile
1. Legal Framework
Governed primarily by the Chilean Commercial Code (Código de Comercio) and specific laws such as the Ley de Sociedades (Law on Corporations).
The key legislation includes:
Ley de Sociedades Anónimas (Law No. 18.046) – regulates corporations (joint-stock companies).
Ley de Sociedades por Acciones (Law No. 20.190) – regulates simplified stock companies (Sociedad por Acciones, SpA).
General civil and commercial laws apply as well.
2. Types of Business Entities
Sociedad Anónima (S.A.) – Corporation or Joint-Stock Company
Can be open (public) or closed (private).
Requires minimum capital and shares.
Sociedad de Responsabilidad Limitada (SRL) – Limited Liability Company
Suitable for small to medium businesses.
Partners have limited liability.
Sociedad por Acciones (SpA) – Stock Company
More flexible, no minimum capital required.
Can have one or more shareholders.
Other forms include partnerships, branches of foreign companies, and sole proprietorships.
3. Formation and Registration
Companies must be registered with the Registro de Comercio (Commercial Registry).
Registration involves submitting:
Articles of Incorporation (Escritura de Constitución)
Public deed before a notary
Publication in the official gazette
The process generally takes a few weeks but can be faster with modern online systems.
4. Corporate Governance
Corporations (S.A.) require:
Board of Directors
General Shareholders’ Meeting
Statutory auditors (for public companies)
SpA offers flexibility, can be governed by shareholders’ agreements.
Limited liability applies to shareholders, protecting personal assets.
5. Capital and Shares
Share capital divided into shares.
Shares can be registered or bearer.
Transfer of shares in SRL requires partner approval.
SpA shares are freely transferable unless otherwise restricted.
6. Taxation
Corporate income tax rate in Chile is around 27% (varies depending on regime).
Other taxes include VAT, withholding taxes on dividends, and social contributions.
7. Foreign Investment
Chile encourages foreign investment.
No restrictions on foreign ownership in most sectors.
Foreign investors must register with the Foreign Investment Committee (Comité de Inversiones Extranjeras).
8. Dispute Resolution
Commercial disputes are handled by ordinary courts or arbitration.
Arbitration is common and recognized by Chilean law.
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