Corporate Alert: New Company Law Enacted

[rubio_higuey]

DGII will exempt all taxes arising out of the transformation of companies, related to the necessary increases in the capital, according to the resolution Norma General 05-09
DGII da nuevas facilidades - Hoy Digital
and directly from DGII:
http://www.dgii.gov.do/noticias/Pagi...merciales.aspx

This exemption will be in effect for companies doing the transformation in the four (4) months following April 1, 2009

[MikeFisher]

so the transformation process can get started right now?, it's april 1st today. around 2 weeks ago i got informed that i can not start the transformation of my company before june.
great info like always from Rubio, thanks.
Mike

[Alfredo Guzman]

Originally Posted by MikeFisher

so the transformation process can get started right now? Mike

No.

Mike,Rubio, the 4-month tax exemption on capital increases due to transformations from one corporate structure to another (i.e., SA to SRL or SA to EIRL) comes into effect once the new law enters into force in June 19th, not April 1st (see Art. 13 of DGII Norm 05-2009). Until June 19th, you will not be able to transform or register new SRL's, EIRL's or SA's; you can incorporate an S.A. right now under the old law, but of course you'll be forced to comply with the new law once it enters into force.

The 4-month capital increase tax exemption does come into effect on April 1st for current S.A.'s that wish to stay under that same corporate structure come June 19. These particular S.A.'s were given until June 11th to undergo a process (called "proceso de adecuación") that will adapt them to the new law requirements for S.A.'s, which may include, a capital increase to meet the minimum RD$30,000,000 authorized capital requirement.

Alfredo

[MikeFisher]

thank you very much Alfredo,
that's the needed info and exactly what i got told 2 weeks ago, the transformation will not be done before June.
thank you very much for the always appreciated top info.
Mike

[drcaycu]

Can a foriegn incorporated company registred in "Registro Mercantil" and at the DGII still operate in the DR in the same way as before? Or does it have to convert to either a S.A., S.R.L. or a E.I.R.L. ??

[Fabio J. Guzman]

Yes, it can operate as before. The new law only affects Dominican companies.

[socuban]

Chapter I, section III, article 13, paragraph I references the ability for S.A. and S.R.L. to register under private signatures.

What is the purpose for doing so, and what are the advantages/disadvantages?

[slas7713]

This questions was never answered and I would still like to know the answer.

Originally Posted by socuban

If I want to set up a new company, should I wait for the June changes, or start now and do the conversation later?

[JDJones]

Originally Posted by Fabio J. Guzman

So what is involved to convert the S.A. to a S.R.L.?

A four-step procedure that I will be detailing later on this board.

Does the S.R.L. afford the same benefits to own property?

Yes

It states that the S.R.L. must poses RD$100,000.00, well the S.A. that owns this house neither expends nor create income, thusly does not have a bank account.

It must have RD$100,000 in capital, not necessarily in cash in a bank. If the capital of the S.A. that is to be converted into a S.R.L. is RD$100,000 or more, there is no need to provide funds for the conversion.

Is there any way to not have the bank account?
See answer above.

Man o' man, I really appreciate this information, Fabio, thanks for putting it out there.

Do you have an idea of when you'll be posting the four step procedure?

[Fabio J. Guzman]

1) C.P.A. must prepare financial statements for the company
2) Financial statements must be sent to Comisario de Cuentas for review.
3) Notice in the newspaper regarding the transformation
4) General shareholders' meeting of the company approving the transformation and the new bylaws.

After the transformation is approved by the shareholders:

1) Recording of the transformation at the Mercantile Registry
2) Recording of the transformation at Internal Revenue