Corporate Alert: New Company Law Enacted

[rubio_higuey]

Originally Posted by MikeFisher

it is the beginning of the transition period, june 19th.
before that day no transition can be done, at least that's what my lawyer told me a while ago when i told her to bring that stuff in order.
don't know how much time over all is given til it has to be finished.
i guess not even the gubmin has any idea how many work they need to get done on the transition process, such deadline may come up later and may also be extended more than once.
Mike

If "adecuacion" gets extension by 18 month, the same would logically go for transformation.

If that piece of legislation gets approved, you can still legally operate those 18 months as S.A./CxA WITHOUT having to transform into SRL. After those 18 months you can transform to SRL if you wish, but nobody can oblige you to transform before the period of adecuacion is over.
Why? First, because if you can operate legally for 18 months as SA you cannot be obliged to change into SRL/EIRL in the meantime; and second, because also in the present law, the day the process of adecuacion ENDS, the next day the process of transformation BEGINS.

Also, several lawyers have submitted suits to the Supreme court to block this new companies act, especially alleging that some requirements (e.g. 30 million capital for SA is unseen anywhere else)

About a month ago there was an interesting article in HOY, the authors (lawyeres) have actually demonstrated that the new corporate act is indeed an act of plagiarism - the two authors of the new corporate law (one lawyer and one person from Consejo de Competividad) have actually copied large portions of this law via Internet from legislation of some other countries, without even bothering to modify it to conform to the DR environment.

I'll see if I can find the article and post the link here.

[MikeFisher]

very interesting, Rubio.
so that would mean that actually there's no real 'transition-start' time, it would be the day after a eventually upcoming 18 months time period?
btw,
been a while that i heard from ya.
how's it going in higuey?
i may be there 2nd next week to frop off some baseball equipments for the boys at the Orphanage's, will drop you a call.
Mike

[rubio_higuey]

I THINK that the 18-month extension has been made as we discussed. Yesterday I saw an ad for Banco Popular in the print where they cancelled the extraordinary shareholder meeting called for June 16th where they were supposed to "adecuate".

The rough translation (I no longer have the original text):
We are informing our shareholders that the extraordinary meeting of shareholders originally called for June 16th, 2009 published in this newspaper on June 1st, 2009, which called for voting on "adecuacion" of our company's Statutes and Bylaws is now being cancelled and called off. We will inform our shareholders in due time when such a meeting for this purpose will have to be called again.

Any inputs from Fabio on this?

[Fabio J. Guzman]

The bill with the 18-month extension is not law yet.

The Chamber of Commerce has extended the period for S.A. to adapt ("adecuar") themselves to the new law until the end of this year. We still have not heard from Internal Revenue (DGII) on whether the tax waiver will also be extended.

The new company law will come into effect on June 19. Beginning on that date, companies may be converted into SRL's or EIRL's.

The primary source for the new company law was French law.

[drevo32]

any updated info about conversion period?

[Manzana]

It's hard not to sound kind of technical with a topic like this but...

Is the SRL like an American LLC in allowing an Operating Agreement rather than the statute to define many details of how the company will function?

Specifically, will the SRL be able to provide the bi-directional liability limitation that an American LLC provides? IE Protecting the company from liabilities of the members as well as the members from liabilities of the company?

Could an American LLC be the controlling member of a Dominican SRL?