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ANNUAL GENERAL MEETING OF SHAREHOLDERS AND OTHER FORMAL OBLIGATIONS APPLICABLE TO BUSINESS COMPANIES
[/vc_column_text][us_separator][vc_column_text]One of the main objectives when forming a company, of any type, is to guarantee its proper functioning, productivity, and operability, without incurring in illegalities or non-compliance. Therefore, it is important to take into account the different formal obligations, in commercial, tax, municipal, among others, to which such companies are subject, from their birth to legal life. Among the most important are the following:[/vc_column_text][us_separator][vc_column_text]
1. Annual General Meeting of Shareholders
[/vc_column_text][us_separator][vc_column_text]In accordance with the provisions of Article 223 of the Commercial Code, shareholders must meet at least once a year, within the first five months of the year, that is, before May 31 of each year. The following items must be included on the agenda: – Approval of the company's management report. – Approval of the financial statements and the external auditor's report for the previous fiscal year. – Appointment of the external and tax auditor (as applicable) and setting of their salaries. – Application of results. These sessions will be documented in Minutes, which must be recorded in the respective book, as provided in article 246 of the Commercial Code, or failing that, they may be recorded in a Notary's protocol.
2. Renewal of business registration, registration of auditors and filing of financial statements.
[/vc_column_text][us_separator][vc_column_text]· Commercial Registration: In accordance with the provisions of articles 411, paragraph one, and 418 of the Commercial Code, and also in order to prove the status of merchant and the ownership of a company, social and individual merchants have the obligation to register and renew their commercial registration annually, in which they will record the nature and economic activity of their company, their respective premises, agencies and branches, detailing their address. The registration of the registration will be governed by the rules contained in article 63 and following of the Commercial Registration Law, in which the fee to be paid is determined, according to the assets of the company and the number of premises, agencies or branches to be registered. · Registration of appointments of external and tax auditors: As a result of the annual General Shareholders' Meetings, the appointments of external and tax auditors arising from these must be registered with the Commercial Registry by submitting a certification of the item in the minutes in which their appointment is recorded, and the corresponding payment of the registration fee. · Deposit of Financial Statements Article 411 of the Commercial Code imposes the obligation for merchants to annually deposit with the Commercial Registry the Balance Sheet, Income Statement and Statement of Changes in Equity of the company, accompanied by the corresponding auditor's opinion and annexes. For this purpose, it will be necessary to submit along with them, the certification of the item in the Minutes of the General Shareholders' Meeting in which their approval is recorded, and the fee imposed by the Commercial Registry for their deposit.[/vc_column_text][us_separator size="small"][vc_column_text]
3. Registration of the company with the corresponding Municipal Mayor's Office and annual submission of asset declarations.
[/vc_column_text][us_separator][vc_column_text]Article 90, paragraph two, of the General Municipal Tax Law establishes that taxpayers, responsible parties, and third parties are required to inform the corresponding Municipality (according to their jurisdiction) of the company's start date of operations within 30 days of the same. In addition, according to the economic activity carried out by each company and according to the current Ordinance of each municipality, the applicable licenses and permits must be requested from the Municipal Authority. At the same time, the aforementioned article, in its fifth paragraph, imposes the obligation to submit asset declarations, along with their respective annexes, within the period and according to the formalities imposed by each municipality, in order to make possible the determination of the respective municipal tax, according to the applicable Municipal Ordinance.[/vc_column_text][us_separator size="small"][vc_column_text]
4. Appointment of a tax auditor before the Ministry of Finance.
[/vc_column_text][us_separator][vc_column_text]In 2019, the Legislative Assembly reformed article 131 of the Tax Code, modifying the applicable thresholds for compliance with the aforementioned obligation. Therefore, currently, the obligation to appoint an auditor to issue a tax opinion is imposed on those taxpayers who meet any of the following conditions: a) Having owned total assets as of December 31 of the year immediately prior to the year in which the opinion is issued, exceeding ten million colones ($1,142,857.14). b) Having obtained total income in the previous year exceeding 4,817 minimum wages in the commerce and services sector, calculated in United States dollars. c) Legal entities resulting from the merger or transformation of companies must comply with this obligation for the fiscal year in which said acts occur and the following one. d) Companies in liquidation, for each of the tax periods or fiscal years, as the case may be, from the date of registration of the dissolution until the date on which the liquidation procedures are completed and prior to its registration. According to the aforementioned article, the appointment of the corresponding auditor must be reported to the Tax Administration within 10 business days. The omission of the appointment, report or late report of a tax auditor in applicable cases, entails the sanctions contained in article 249 of the Tax Code. According to the above, the importance of guaranteeing compliance with both formal and substantive obligations, to which a company is subject from its incorporation, is verified. This will allow its legal functioning and prevent the imposition of sanctions by the competent Authorities.
Written by:
[/vc_column_text][us_person image=”9077″ name=”Laura Hernández” role=”Asociada” link=”url:http%3A%2F%2Flexincorp.com%2Fequipo_elsalvador%2Flaura-hernandez%2F|title:Laura%20Hern%C3%A1ndez||” layout=”cards” img_size=”full”][/us_person][/vc_column][/vc_row]
