A limited liability partnership is similar to a general partnership, but with a key difference: the personal liability of each partner is limited to the amount of capital they contributed or to a greater amount specified in the partnership agreement.
The partnership is formed through a public deed, which must include the required information for a partnership agreement and a statement specifying the limited liability of the partners.
The name of the partnership must include the name of one or more partners or a reference to the partnership's purpose and must end with the word "Limited."
If the name does not meet these requirements, the partners will be personally liable for all the partnership's obligations.
Like a corporation, an extract of the partnership agreement must be filed with the Commercial Registry of the Real Estate Custodian and published on the website of the Official Gazette within sixty days of the partnership's formation.
A company by shares, also known as a "sociedad por acciones," is a legal entity that can be created with one or more shareholders.
The liability of the shareholders is limited to the amount they have contributed or agreed to contribute.
We recommend this type of company because of its flexibility as well as being able to establish different series of shares in its bylaws.
In the absence of specific provisions in the bylaws, the rules governing corporations apply. The bylaws of a company by shares can be established in a public deed or in a private instrument, as long as the shareholders' signatures are notarized.
The bylaws must include, at a minimum, the following:
• the name of the company, which must include "SpA,"
• the business line of the company, which will always be mercantile
• the capital of the company,
• and the number of shares.
The bylaws must also include information on how the company will be managed and who will provisionally manage the company, it is important to note that the Joint Stock Companies have total freedom to determine their management system and a sole legal representative can act with total or restricted freedom that is completely determined by the shareholders.
A notarized summary of the bylaws must be filed with the Register of Commerce and published on the Official Gazette website within one month of the incorporation of the company.
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.
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.