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How to Run a Corporation Successfully?

A corporation is the legal person whose purpose it is to carry out commercial acts subject to commercial law. A commercial company has a nominative nature where there is an obligation and there is a

A corporation is the legal person whose purpose it is to carry out commercial acts subject to commercial law. A commercial company has a nominative nature where there is an obligation and there is a subsequent application of that contribution to achieve an economic goal.

Companies originate when two or more people share an interest and decide to make contributions to build social capital. As partners in the company they participate in making decisions about what the company does while sharing in the profits and losses that the company undergoes along the way.

Regarding the constitution of a company, the first thing to take into account is the type of company that is desired. The most common ones in Costa Rica are: Sociedad Anónima, Sociedad de Responsabilidad Limitada, and Sociedad Limitada.

The Sociedad Anónima is made up of three indispensable figures: President, Secretary, and Treasurer and it is a company that is of a common and nominative nature, made up of shares. The Sociedad de Responsabilidad Limitada or Limited Liability Company, is made up of two people that act as managers. Said company is nominative, and is composed of quotas. The Sociedad Limitada or Limited Company is also represented by partners known as managers but the difference is that the capital is distributed in equal shares and is accumulative and indivisible.

Societies must maintain order to be successful. The first step to carry out is the acquiring of the legal books, which will vary depending on the figure that the partners want to establish, be it a Sociedad Anónima, a Sociedad de Responsabilidad Limitada, or a Sociedad Limitada.

Public Limited Companies have to keep three legal books: the Minutes, Register of Shareholders, and Board of Directors. Limited Liability Companies and Limited Companies have to keep two books: the Minutes and the Register of Quotaholders and each of these books must contain information about the partners and the incorporated company. That is, the minute book must contain at least the reason for starting the company and the information on the incorporation of the company. In addition, the Register of Shareholders or Quoters must contain the distribution of the shares and this information must also be clearly recorded within the incorporation articles, delineating how the shares will be distributed. In the case of Public Limited Companies, the book of the Board of Directors must indicate the positions of each partner in the company, be the President, Secretary or Treasurer who will, in turn, make up the quorum.

For the correct functioning of the books, it is also necessary to have a structure such as an Annual Meeting to share the economic reports of the company and comply with the tenets established by the partners. Within any period, assemblies, whether ordinary or extraordinary, may be held, depending on the clauses that are activated within the assemblies themselves.

The health of a partnership is, naturally, dependent on the partners. One of the main ways your partnership can fail is if you and your partner have differing definitions of success and therefore focus your efforts in different directions. The success of the incorporated company goes hand in hand with the people who constitute the company and relies on those people having the same vision and common goals. It is also key that the company implement business transparency from the beginning.

For an active society to become and remain successful, there are several steps to follow. One of the most important ones is to carry out a market study in order to determine the “supply, demand” of the product or service. Although many partners might find this research unnecessary or tedious, it is very simple to carry out, since it can be done online and through social media. Before conducting market research, it is important to have a clear direction so that the research can be detailed and efficient.

Corporations must comply with a transparency regime established by law, as well as with financial controls established by institutions, such as the Registry of Transparency and Final Beneficiary by Central Direct of the Central Bank of Costa Rica and another one known as D-cent forty, a mandate of the Ministry of Finance designed for the declaration of both active and inactive companies. In this way, the treasury can have clarity about the activities carried out within them and can verify that all of the established norms are complied with so that the company functions successfully and abides by the law.

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nmaquinay@outlierlegal.com

More than 4 years of experience as a Legal Assistant in areas of Civil, Contractual, Criminal, Business, Labor, and Family law; Customer service and legal research in several countries such as Costa Rica, Panama, France, and Switzerland.

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