Corporation (“sociedad anónima”)

The corporation is a legal person that results from the forming of a single equity contributed by the shareholders.

The shareholders’ liability is limited to the amount of their individual contributions. The corporation can be publicly traded or closely held and managed by a board of directors, whose members can be replaced at any time. Chilean law considers that a corporation's activities are always mercantile, even though it is formed to carry out acts that would otherwise be deemed to be subject to civil law, and not mercantile law.

We usually do not recommend the incorporation of a Corporation because it is not possible to operate under a sole shareholder Structure and the administration of the company must always be through a directory of at least three directors, which makes compliance more expensive.

A corporation can be: listed, special or closely-held.

A corporation will be considered to be listed when it voluntarily or legally registers its shares in the Securities Registry of the Financial Market Commission (also "CMF” as per its acronym in Spanish)

It shall register its shares in the aforementioned Securities Registry and be subject to the control of the CMF when:

• The corporation's shares or other securities are listed on a Stock Exchange or are offered to investors in general through a public offering.

• The corporation has more than 500 shareholders.

• At least 10% of the subscribed capital is owned by more than 100 shareholders (excluding any shareholder that individually owns, either directly or through another person or legal entity, more than 10% of the corporation's capital).

• The corporation has elected voluntarily to be subject to the regulations and standards of a publicly traded corporation

When a company is not considered as listed or special, it is referred to as a closely-held corporation.

The creation of a corporation requires a notarized deed that must include, at a minimum:

• The names, professions, addresses, and Tax ID numbers of the shareholders who are starting the corporation.

• The name and location of the corporation.

• The purpose for which it is being created.

• the length of time for which it will exist

• The capital and number of shares must also be included in the deed.

Additionally, the deed must specify how the corporation will be managed, how profits will be distributed, and how the company will be dissolved. The nature of arbitration for disputes between shareholders or between shareholders and the company or its administrators must also be included.

The members of the provisional board of directors and external auditors or account inspectors, if any, must also be appointed in the deed. This information must then be registered and published within 60 days of the date of the deed.