The Legal Entities to Start Business Opportunities in El Salvador
Every country has their own legal laws and it applies to every company that is being set. El Salvador is a country based out in Latin America which is growing exponentially for its business opportunities. The three important legal entities for starting business opportunities in El Salvador are:
- The Limited Liability Company (L.T.D.A.)
- The Public Limited Company (S.A)
- The Branch Office Company (Sucursal)
The Limited Liability Company
A company formed by the partners who hold the shares of the company, hence the capital is invested by the social participation of the partners but not stock. The administrative work of the company is set up by the company’s management and the role of the legal representatives of the company is taken up the by the partners or the managers of the company.
This company structure suits the best for the private companies and also this structure of the company is formed when the third party and the partners come together. Once the company has been formed as per the norms, the company’s name must include the name “The limited liability company” to complete the registration process.
The Public Limited Company (S.A)
The most common form of company which is formed amongst the private companies is the Public Limited Company. Shareholders are an important part of this group and the investing capital comes from the stock. The legal administrative role of the person is defined by the directors. The companies belonging to this category must include the word “Sociedad Anonima”.
Establishing the Public Limited Company is beneficial as the capital investment comes from the stocks and the no. of participation of the shareholders is not limited under the public limited company.
The Branch Office
The branch office is the common legal entity followed in El Salvador because of the complicated registration process at the Ministry of Economy. Setting up a branch office in El Salvador requires the following documentation:
- Capital investment of USD $12,000
- All the supporting and necessary documents that proves the company has been established legally in its origin location.
- Documents of the current bank account
- The branch office of the company should include the words “El Salvador Branch” along with the name of the head office.
- The branch office that is to be put up in El Salvador must follow all the above steps and must register before the “Commerce of Registry”. The companies legal entities must be represented by any one of the following:
- The Board of Directors of the company who will be the legal representatives of the company
- Establishing Power of Attorney to a legal representative who shall be appointed by the Board of the Directors.
- The growing economy of Latin America, El Salvador has unexploited markets which is attracting a lot of business opportunities and for the smooth functioning of these businesses, the companies legal entities must be established.