[vc_row][vc_column][vc_column_text]
OBLIGATIONS OF MERCHANTS REGARDING BUSINESS REGISTRATION.
[/vc_column_text][us_separator][vc_column_text]In El Salvador, over the years, the commercial system has been changing according to the needs and evolution of commerce; however, we cannot ignore the fact that today we find ourselves in a generation of globalization and that significant changes are often required. During these changes, our commercial legislation has undergone sometimes radical changes, such as the Commercial Code, which in decrees of May 8, 1970, and February 13, 1973, made the distinction between a company and its owner, since in previous years there was an erroneous concept of society and company. In this legislation, evidentiary value was given to prove the status of merchant that a person has and the ownership that said person has over the commercial company. Currently, our commercial legislation, the laws that regulate aspects of commercial registration, are the Commercial Code and the Commercial Registry Law. Regarding the Commercial Code, which establishes the obligations of merchants, both individual merchants and social merchants, Article 411 of the Commercial Code establishes in its first Roman numeral that the obligations of individual and social merchants are to register their commercial enterprise and register their respective premises, agencies, or branches. This obligation, in accordance with Article 15 of the Commercial Code contained in Book Two, establishes that individual merchants and small-scale industrialists whose assets are less than twelve thousand United States dollars are not subject to compliance with professional obligations. They will only comply with that contained in Roman numeral IV of Article 411 of this same Code, which is: to carry out their activity within the limits of free competition established by law, commercial uses, and good customs, abstaining from all unfair competition. Article 412 of the same legal body establishes that the commercial registrations are those of companies and commercial establishments; This registration is the only document capable of proving the merchant's status and the ownership of the commercial company and its establishments. Obtaining it is mandatory, since no commercial company or its establishments can operate without having obtained the respective commercial registration. This registration, in addition to its registration, must be renewed annually. Failure to renew it is punishable by the ex officio cancellation of the commercial registration and the imposition of fines. This is where the Commercial Registry Law comes into play, establishing the fee that the merchant must pay to apply for and renew their commercial registration, as regulated in Article 63 of the same law. Article 64 also sets out the commercial registration renewal process, the payment period, and the fines of 25%, 50%, and 100% imposed on merchants who do not renew their commercial registration within the term established by law. Article 86 of the same legal text applies in the same way to merchants requesting registration for the first time. Being in article 65 of the aforementioned law, where the procedure for the sanction consisting of the cancellation of the commercial registration is found, and the fines that are imposed through a legal presumption consisting of the merchant who has not renewed his commercial registration and it has been cancelled, at the time that he requests his rehabilitation, it will be presumed that in the time that he has not renewed the registration, he has exercised the trade and therefore must cancel the respective rights of commercial registration and the respective fines referred to in article 64 of the same law.
COMPANY REGISTRATION
SUBMISSION REQUIREMENTS
PERIOD FOR SUBMISSION OF FIRST-TIME REGISTRATION APPLICATIONS AND RENEWALS
[/vc_column_text][us_separator][vc_column_text]
PERSONA NATURAL
Based on Article 86 of the Commercial Registry Law, every Individual Merchant, who according to the Commercial Code must obtain registration for his commercial company, will be required to request it within 30 days following the date on which the Ministry of Finance has assigned his Taxpayer Registration Number for the Tax on the Transfer of Movable Property and the Provision of Services.
LEGAL ENTITY (COMPANIES)
Following the reforms to the Commercial Laws that came into effect in June 2008, every Commercial Company must submit its application for First-Time Registration along with the Company's Articles of Incorporation.
PERIOD FOR SUBMISSION OF APPLICATIONS FOR RENEWAL OF LICENSE PLATE
PERSONA NATURAL
As established in Article 64 of the Commercial Registry Law, the Application for Renewal of Business Registration, in the case of a Natural Person, must be submitted during the month of the birthday of the Business Registration holder.
LEGAL ENTITY (COMPANIES)
Also based on Article 64 of the Commercial Registry Law, the Application for Renewal of Business Registration for companies must be submitted during the month in which the Deed of Incorporation of the company, holding the registration, was registered in the Commercial Registry.
HOW TECHNOLOGY HAS INFLUENCED THE ORDINARY WAY OF CARRYING OUT BUSINESS LICENSE RENEWAL IN EL SALVADOR.
In El Salvador, there are currently two ways to renew your business registration: 1) To keep your business registration current, you must visit one of the departmental offices of the El Salvador Commercial Registry. Once there, you must process your documents and pay the renewal fee (and any applicable fine). 2)MiEmpresa.gob.svIt is the electronic window for procedures of the Government of El Salvador. It allows users to complete the necessary procedures to obtain 25 registrations for individual merchants and companies with eight public and private entities. The system tells them which institutions they should register with and what data, documents, and fees are required, depending on their situation. They fill out a single form, upload documents once, pay all fees at once, and retrieve their registrations in one place. Additionally, a digital copy of the registrations is available in a private and protected space (a digital safe) where users store their data, documents, and records online. These can be used for subsequent applications. It also includes a benefits catalog containing health, training, and financing programs, among others, for entrepreneurs.
LEGISLATIVE DECREE NUMBER 62.
TRANSITIONAL PROVISIONS FOR THE RENEWAL OF BUSINESS REGISTRATION AND PREMISES REGISTRATION FOR 2021 IN VIEW OF THE ECONOMIC EFFECTS CAUSED BY THE COVID-19 PANDEMIC
Under the current circumstances of our country and as a result of the economic crisis caused by the COVID-19 pandemic, many companies have faced situations that have made it difficult to comply with various commercial obligations, including the need to maintain their business registration, despite their desire to regularize their business registration in order to comply with the legal provisions governing business registration. For this reason, on June 21st of this year, Legislative Decree No. 62 was published in the Official Gazette, Volume 431, No. 117. This decree contains three articles. It states that if you are a merchant and have not yet renewed your business registration and registration of branches, agencies, or premises, you may submit the procedure until August 31st of this year, paying only the registration fees corresponding to the current year, without any fines or surcharges. The company registration and pending registrations from previous years may be renewed during the validity of this decree from the day of its publication in the Official Gazette, even if it is not yet the month in which said application must be submitted, and its effects will end on August 31 of this year.
Written by:
[/vc_column_text][us_person image=”9266″ name=”Juan Carlos Preza” role=”Asociado” layout=”cards” img_size=”full”][/us_person][/vc_column][/vc_row]
