17 December 2019

Simplified stock corporations

(URUGUAY: SAS)

Law 19.820 promotes the development of entrepreneurial culture, by regulating different topics of interest and especially with the creation of a new social type called ´Simplified Stock Corporations´ better known in Spanish as ´Societies for Simplified Actions´ (SAS).

The legislation seeks to minimize costs, expedite the time of constitution and optimize the use of technological tools.

This new social type can be formed by one or more natural or legal persons (except for a single limited liability company, in Uruguay S.A.).

Constitution:

The constitution and amendment of statutes does not require certain approvals or publication of notices (Does not require intervention by AIN in Uruguay).  

The statute will be registered in the Uruguayan Public Registry of Commerce and in case of the use of digital means, it is anticipated that the Registry will be required to perform the qualification within 24 hours.  Reiterating, no publications required. Also, it does not establish the term of the company.

SAS may have as a social object any commercial or civil activity provided that it is not prohibited, or is legally established that, in order to carry out a certain activity, they must adopt a certain social type of those governed by General Corporation Law (16.060), such as: Insurance or Financial Activity.

In accordance with capital, a minimum of 10% should be integrated.

The total integration of the shares must take action within 24 months of the constitution. The actions may be registered shares or the ones that are not represented by negotiable securities.

Bylaws may restrict and even prohibit the trading of shares (period: 10 years).

The law gives flexibility for partners to establish the way in which society operates and organizes.

With this flexibility given to SAS you can adopt the figure of an administrator, that of a directory or any other form of action that the partners determine. 

It is envisaged that representation may be exercised by one or more natural or legal persons and its designation may be statutory or resolved at a shareholders' meeting.

Social entities are allowed to hold meetings in person or by any other reliable means of simultaneous communication such as video calling.


TRANSFORMATION IN S.A.S.:

Any trading company (except for S.A.) may be transformed into SAS. The law provides for a one-person company to become SAS.

Tax regime:

SAS is given the same treatment as partnerships and in the event of a disposal of shares, will be taxed just like a limited liability company.

As related to Economic Activities Income Tax (IRAE) given similar treatment to partnerships companies, the stipulated taxation system bases settlements in a presumptive income, with rates reduced according to the legal nature of the entity as well as the income level (may be applied up to the maximum amount of IU 4,000,000.taxation)

The administrator, directors or members of the administrative entity (and other than the legal representative), shall be jointly and severally liable to the company for the payment of the IRAE, a rule similar to that for limited liability companies and partnerships.

In reference to social security contributions, the administrator or those who are part of the administrative entity or the legal representative shall pay for social security.

Shareholders shall be liable only until the amount of the respective contributions corresponding to the integration of the shares they subscribe to or acquire.

Partners shall not be liable for the obligations of work, taxes or any other nature incurred by the company.

Fernando Salazar, Auren Uruguay

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