Companies can be classified by their size, source of capital, or economic activity. They can also be classified by their legal form. In this article, we will explain this classification and the main types of companies in the Dominican Republic.
Companies are an important and essential part of a country’s economy. When creating a company, the first thing to be clear about is its legal form. In this article, we will tell you about the types of companies according to their legal form in the Dominican Republic.
Types of companies according to their legal form in the Dominican Republic:
Here is the classification of companies based on their legal form:
Individual Limited Liability Company (EIRL):
This type of company is one of the most common in the Dominican Republic since it has a single owner and is made up of an independent estate, which is separate from the other assets or properties the owner may have.
Limited Liability Company (SRL):
This type of company is one of the most representative in the Dominican Republic, consisting of a minimum of 2 partners and a maximum of 50. The partners are only liable for debts with the contributed capital and will not have to use their personal assets.
Simplified Stock Corporation (SAS):
Simplified Stock Corporations in the Dominican Republic require a minimum of 2 partners, with no maximum limit. The partners are only responsible for the amount of their contributions. The authorized minimum capital cannot be less than three million pesos.
Corporation (SA):
Corporations in the Dominican Republic are made up of at least 2 partners under a corporate name. This type of company is one of the most commonly used for large-scale businesses. The authorized share capital must be at least thirty million pesos. Losses are limited to contributions.
What is the legal form of a company?
The legal form is the legal identity of a company, considering the liability of its partners or owners in legal terms.
It will also define the tax obligations of the company and the responsibilities it has towards third parties.
The legal form of a company can be defined as the identity under which the company or business will be developed.
At Contadores Dominicanos, we have the best professionals who can advise you on the legal constitution of your company.
What are the legal forms of a company?
Currently, we can distinguish two types of legal forms:
- Individual companies: in these companies, the owner is a single person who has unlimited liability to third parties and must respond with all their assets. These are usually small or family businesses.
- Corporate companies or partnerships: generally, these companies are made up of several people. We can find different types of partnerships, such as corporations, general partnerships, limited partnerships, and social interest companies: cooperatives.
How to choose the legal form of a company?
- According to the number of partners: based on the number of people involved, the legal form of the company can be defined. If there is only one person, it would be an individual company, and this person would bear all responsibilities. If there are several people, it would be a partnership, and the liability of the partners should be considered to define the type of partnership the company corresponds to.
- According to the patrimonial liability: this is another aspect to consider since liability can be limited or unlimited. In the case of limited liability, the partners are only responsible for the contributed capital, but in the case of unlimited liability, the partners must respond with their personal assets.
If you want to know all the types of companies that exist in the Dominican Republic and their main characteristics, read the following article: types of commercial companies.
