Distinguish Between the Comparison and Contrast of the Types of Companies in Ecuador
Ecuador has become a famous place to do business as the business opportunities are increasing along with the attractive government schemes. Abundance of natural resources and the stable national currency has attracted foreign investment which has thus contributed to the growing GDP. The types of companies in Ecuador that can be formed under the company law of Ecuador must be understood carefully by the investor before selecting one.
Selecting the right kind of company structure depends on the purpose of the business and its objective. Every type of company’s structure provides different benefits and thus selecting a relevant structure of the business is important to get the benefits.
Two most important legal entity structure of business in Ecuador are:
- Corporation – Sociedad Anonima (Unlimited liability Company; SA
- Limited Liability Company – La Compania de Responsabilidad Limitada (LLC)
Different Types in Ecuador
The different types of companies in Ecuador:
- Collective Name Company
- Limited Partnership
- Limited Liability Company
- Unlimited liability Company
- Mixed Capital Company
All these different legal entities in Ecuador must have a legal representative and they must have a local address. All these companies need to pay a tax declaration monthly and annually.
Differences between the companies type in Ecuador
The Corporation or the unlimited liability type of company is the most common legal entity structure of Ecuador. There are differences amongst the two companies that can be formed in Ecuador which are in the decision making and for business dealings. Let’s understand both:
Limited Liability Company
The corporate companies can have objectives for commercial, civil or sale services. No bank or insurance companies can operate under this structure of company.
A LLC needs to have a minimum of 2 partners but the no. of partners cannot exceed more than 15. The minimum capital investment required to begin LLC is USD 400 and it can be paid in instalments within 12 months after 50% of the capital that is been paid while registering the company.
A General Manager and a President must be appointed who must share responsibilities legal, judicial representation.
Unlimited Liability Company
The unlimited liability company is the company where negotiable amounts of share contributes for the capital investment. The shareholders can contribute for the capital. A minimum of two partners is required to form a corporation type of company. The minimum capital investment requires an USD 800 which can be divided into shares and this is decided by the board.
The shareholders form the main body of the business and these companies need to appoint a General Manager and President who shall bear the responsibility of legal and judicial matters.
Creating an Online Company in Ecuador
Countries like Colombia and Argentina have simplified companies which do not exist in Ecuador, hence Company Superintendence Services can be used to create an online company in Ecuador. Forming an online company in Ecuador is a cost effective and quick way to form a LLC. Using this online service, you will need to choose one social objective along with 5 activities which are mentioned in International Standard Industrial Classification (ISIC). The laws of the company include the following details:
- Detailed information about the company
- Details about partners of the company and shareholders
- Details about the board
- Status about the online process
Ecuador is becoming a hub for foreign investment and this is the most exciting period in the history of Ecuador. This is the time when you must invest in Ecuador.