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Creating a Company in Costa Rica

ARTICLE - General Information on Incorporating a Company in Costa Rica.  Explanation of the standard text contained in the deed of incorporation for the two most widely used companies in Costa Rica: the Sociedad Anónima (S.A.) and the Sociedad de Responsabilidad Limitada, and their main differences. I. Sociedad Anónima: The "Sociedad Anónima" is similar to a stock corporation. It is established by granting an incorporation writ that usually includes the following points: 1. Incorporators. It establishes the persons that are forming the corporation. Full name, personal identification number (passport number, in case of foreign citizens), marital status, title, domicile, and exact address shall be included. A foreign company can appear as one of the incorporators. 2. Name. Establishes the name that the company will have. Also specifying other terminology or logos that the company may use in letterhead, publications, etc. Terms in foreign languages are not generally accepted. However, if one of the incorporators has a name in other language, this name could be used, by attaching two letters at the end: “S. A.” which means “Sociedad Anónima”. 3. Objective. Establishes the activity that the company will have. Usually very broad, covering most of eventual fields of its intended activity. If you do not to have special requirements, we shall supply the text. 4. Term. It establishes the planed duration of the company in number of years. It can also be extended at any time. Commonly this term is 99 years. 5. Domicile. Where the company has its headquarters. It has to be a precise address, usually in San José , but it can also be able to perform activities in all of Costa Rica , and abroad. 6. Capital. Establishes the company’s capital stock. Indicating the total amount subscribed and paid in capital, how it is divided and paid, number and type of shares. In cases of capital subscribed in cash (as opposed to capital subscribed in kind), it has to be deposited initially in an escrow account at a local bank. If it is done through a Certificate of Deposit, this deposit in escrow is not required. 7. Shares. The shares, or certificates of shares, have to be registered, indicating the name of the owner. 8. Inventories and Balances. These are made at the close of every fiscal year (September the 30th). Costa Rica follows generally accepted accounting practices. 9. Meetings. The Shareholders should hold an annual ordinary meeting within three months following the end of the fiscal...

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