On February 11, 2024, reforms to the Commercial Code regulating Simplified Stock Companies (SAS) came into effect, a business structure that promotes agility and flexibility in business operations.
According to our managing partner, Hector Torres, SAS are legal entities formed by the will of one or more natural or legal persons, whose liability is limited to the amount of their respective contributions. This new regulatory framework grants SAS a commercial nature, regardless of their intended activities.
For our expert, a key aspect of these reforms is “the ability to establish SAS with a single shareholder. Additionally, it can be established with a minimum capital of $1.00 and there is no need to make the contribution at the time of its constitution.”
Another relevant point is the capacity of SAS to issue different classes and series of shares, offering shareholders the possibility to decide on the rights and limitations associated with these.
“It reinforces the rights of minority shareholders, as those holding at least 5% of the shares can convene or include items on the General Shareholders’ Meetings agenda or request direct reports from the company’s management. However, this percentage increases to 10% in the case of the right to request the inclusion of approving and distributing dividends as an agenda item,” comments Hector.
The reform also details light accounting provisions for micro, small, and medium-sized entrepreneurs, where companies with assets below $12,000.00 can keep their accounts themselves or through third parties, without the need for an internal or external auditor.
“Informal businesses will be able to legalize their commercial activities. Additionally, it provides them access to credits and the possibility of participating in both public and private purchase and sale transactions,” assures Torres.
Likewise, the reform proposes the possibility of transforming any company into a Simplified Stock Company, facilitating the merger between SAS when one owns 90% of another SAS, which can be a very practical strategy for restructuring within corporate groups.
Finally, the general rule for resolving conflicts between shareholders, shareholders and the company, shareholders and administrators or liquidators, and company and administrators is mentioned. At this stage, our partner suggests Direct Settlement (special mediation and arbitration). In case of no conciliation, recourse is made to the courts.
“Rules for expedited dissolution are also contemplated if there are no pending obligations, duly accredited by a certified public accountant or an external auditor, following the process established in the Commercial Code,” concludes our lawyer.
-Written by Torres Legal Team.