I´ve had many inquires about the use of having a corporation in Costa Rica, and I would like to explain the ways of having a corporation and its benefits:
The name for them is Anonymous Societies, because the stockholders are never mentioned anywhere, only in the first document or Constitution the Notary Public takes note of the parties that make the Society and that are the stockholders initially, and after that the National Registry does not take note of that and they are never mentioned again, unless they want to be.
The stocks in a Anonymous Society are transferable with only the stockholder signature in the back and can change hands as many times necessary, They are presented in the annual meeting so the board of directors can take note of the presence of the stock and its holder.
The Commerce Code of Costa Rica, which is a copy of the Mexican Commerce Code which is also a copy of the Spanish Commerce Code had the original intention of making possible the trip to the new found lands of America at the beginning and kept that idea thru time. This gave the explorers a Legal instrument to finance their expeditions and at the same time, it gave the investors, security in their investment because they owed a percentage of the corporation that made the trip and so, the same percentage of the benefits of it.
The Corporation in this sense is a legal individual, who represents the interests of its stockholders, it was important to be able to claim a piece of the new riches found in the new found lands once the trip was finished.
Thru time the idea of the Anonymous Society has change very little, so the legislation is intended in that type of Entity, a big Corporation with allot of stockholders who start a new business or service and who initially is financed by the stock holders and then when the business is running they get back their percentage of the earnings.
But times have changed and we lawyers have found new uses for the legal figure of the Corporation, it is still intended for the initiation of a business that would generate income but there is also another use for it.
The corporation can be used to hold your assets in Costa Rica, and it can become a good way to limit your liability in a personal responsibility situation you may encounter.
If your idea is to buy a house or real estate in Costa Rica, it would be recommendable to do it thru a corporation so that those properties stay away and safe from your personal responsibilities.
To constitute a corporation you require
- At least to persons, because a Society means at least two.
- An amount of capital to give economical ground to the corporation ( who much would stocks cost and how many stocks shod be made).
- A board of directors that is made up of a President, Secretary a Treasurer at least
- A fiscal who has the obligation of vigilance of the Corporation activities
- A Resident Agent, that normally is the Notary Public who constitutes the Corporation, who will the responsible of receiving judicial and extra judicial notifications for the Corporation.
- A legal representative for the Corporation that is normally the President of the Board of director or him and the Secretary acting together.
- It has to be specified if the power of attorney given to the Representative, has limitations or is as the Spanish legal term says GENERALISIMO SIN LIMITE DE SUMA, that means he can buy sell and in any way decide of the assets of the corporation.
The corporation has a set of six legal books in which the changes in it are made, the inventory, the stockholder registry, the general assemblies and the board of directors assemblies are kept, also a book that states the annual balances of the fiscal year. ( In Costa Rica from October 1 to September 31 of every year).
You may change the board of directors, the powers they have and all the possible agreements necessary for the corporations to operate.
Many corporations never even use their books, because they never have commercial activity and its board of directors never changed. This is the case when the corporation is used only to hold real estate or vehicles, never makes any type of business and stays away from trouble, and it actually can because, different from a fisical person, a juridical person never has the possibility of having liability for accidents or criminal activities, but there is always an exemption to the rule.
- Vehicle accidents, the corporation will be responsible for the damage caused by the accident, and if the car is not well insured or the deductibles are not paid the other assets can be foreclosed to pay for the amounts pending, so have a good insurance in your vehicles or keep cars and real state in separate corporations
- If your corporation has an employee it would be responsible for the work benefits and accidents of its employees, as well as of following the regulations on work risk insurance and social security.
- In case of mortgage to the real state of the corporation, if the property given in mortgage does not cover all the expenses of the foreclosure, the other real state registered on the same corporation would be liable for the amount pending after final foreclosure.
It is very important to have control over the board of directors so you never loose sight of the real state that is in the name of the corporation, also to keep the stocks and legal books in a safe place, always have a lawyer and a good accountant to keep the corporation up to date with all its requirements, file all tax statements on time to avoid penalties for late presentation.