The Chilean equivalent of the corporation is the sociedad anónima, or SA. SAs are generally structured in a more complex way than SRLs, and are viewed as having more legitimacy. They are better structured for raising large amounts of capital. It is mandatory that companies issuing publicly traded shares, companies with shares owned by the Chilean state, as well as banks, insurance companies, and soccer teams be incorporated as SAs.
How to Incorporate as an SA
Incorporating as an SA is essentially a matter of preparing the right paperwork correctly. You will eventually need to hire a lawyer or accountant to help you prepare the paperwork, but getting the right documentation ahead will help you speed up the process. You can also hire and authorize your accountant or lawyer to file your papers for you; it is not even necessary that you be present for the registration itself.
Documents to Submit
You and/or your representative must submit the following documents (each is elaborated on immediately below):
- Bylaws (or deed) (escritura) notarized by a local notary (elaborated below)
Length of Process
The entire process usually takes about 10 days.
The SA is formed by a notarized contract. SA contracts must be done as notarized escrituras.
The following information must be included in the contract:
- Name of company: The name must end with “SA.”
- Social objective: This is your company’s basic task and scope. Your company will have to engage only in operations within the scope of your declared task.
- Legal address of your company: This can be your or your lawer’s address (or that of whoever has power of attorney to represent you).
- Capitalization: You must state the amount of capital being put forward by the shareholders; for any capital that is not in the form of cash, you must state the form, its estimated value, and how it will be delivered. You must also state whether any shares have preferred status…
- Names of board members (minimum of three): The board must declare who will be your company’s president (presidente) and General Manager (Gerente General). The board may give the powers of attorney of the company to anyone and everyone they wish.
- Company Life-Span
- How dividends will be distributed
- Governance: You may also declare in the contract the governing structure and rules of your SA, such as voting rights, voting rules for both ordinary and extraordinary decisions, and rules for bringing in additional capital, dissolving the company. Depending of type of decision, it must be taken by the board or through a shareholders meeting.
- How the SA will be liquidated
- How disagreements among shareholders will be settled.
Personal Information and Documentation
For each shareholder in your SA, you must provide the following:
- Name and last name
- Passport with photocopy of first two pages or Chilean cedula de identidad with photocopy
- Marital status
In addition to presenting the abovementioned paperwork, you must provide them with a formal corporation book, or libro de actas (blank copies of which can be purchased at bookstores in Santiago), where your company’s resolutions and modifications will be printed.
It costs about US$1,000 to US$5,000 to incorporate as an SA, including legal fees.
SAs are generally more expensive to maintain than SRLs, and that it is absolutely necessary to have a lawyer or lawyers when running an SA. While an accountant (contador) may be all you need on staff for an SRL (for tax and other accounting purposes), with SAs there are simply so many aspects of corporate governance, filing, and compliance that you must manage, that hiring a lawyer becomes essential.