In Costa Rica, there are four types of companies:
The corporation The limited liability company. The general partnership. The limited partnership The trading companies most commonly used in Costa Rica are corporations and limited liability companies
How Does a Corporation Work?
The General Meeting is the main organ and is made up by the partners. Ordinarily, the Meeting meets once a year, and extraordinarily, as the need arises. Management of a corporation is conducted through a Board of Directors, which must include at least a President, a Secretary, and a Treasurer. Inspection is carried out by appointing a Supervisory Director.
What Is a Corporation?
A corporation is a legal entity in which you participate as a partner, by means of a number of shares with a specific value. The corporate capital is different from the partners' personal capital. Agencies and branches may be established inside and outside of Costa Rica and can perform all sorts of business. If you want to invest or develop an activity without using your personal assets to secure any debts you may want to acquire, the corporation is a perfect option, given that in a corporation, you will be liable only up to the amount of capital that has been contributed.
Formation of a Corporation
A minimum of two partners is required to form a corporation. It is not allowed to register the entire corporate capital in the name of one single person at the time of incorporation, but it is possible to subsequently assign all shares to one single shareholder. In the event of partners sitting on the Board of Directors, this gives us a minimum of 4 people to form a corporation.
To form a corporation, the following aspects must be defined:
What will be the corporate name? This can be a fictitious name. Currently, it is also possible to register companies whose name consists of the corporate identity number assigned to them by the Registry.
What will be the corporate capital and share distribution?The general amount of the capital, the value of each one of the shares, and how they will be distributed among the partners.
What will be the corporate domicile? The place designated to receive communications.
What will be the duration of the corporation? It is required to determine the number of years the corporation will exist. The duration commonly used is 99 years.
Who will represent the corporation? By law, the President is the judicial and extrajudicial representative of the corporation, with...