On February 11, 2024, reforms to the Commercial Code regulating Simplified Joint Stock Companies (SAS) came into effect, a business structure that promotes agility and flexibility in business operations.

According to our managing partner, Hector Torres, SAS are legal entities formed by the will of one or more natural or legal persons, whose liability is limited to the amount of their respective contributions. This new regulatory modality grants SAS a mercantile nature, regardless of their intended activities.

For our expert, a key aspect of these reforms is “the ability to establish SAS as single-member entities, allowing them to be created with a single shareholder. Additionally, it can be established with a minimum capital of $1.00 and it is not necessary to make the contribution at the time of its formation”.

Another point of relevance is the ability of SAS to issue different classes and series of shares, offering shareholders the possibility to decide on the rights and limitations associated with them.

“It reinforces the rights of minority shareholders, as those holding at least 5% of the shares may call or include items in the General Shareholders’ Meetings or request direct reports from the management of the company.

However, this percentage increases to 10% in the case of the right to request that the approval and distribution of dividends be included as an agenda item,” comments Hector.

The reform also details light accounting provisions for micro, small, and medium-sized entrepreneurs, where companies with assets below $12,000.00 can keep their accounts themselves or by third parties, without the need for an internal or external auditor.

“Informal businesses will be able to legalize their commercial activities. Additionally, it provides them with access to credit and the possibility of participating in both public and private purchase and sale transactions,” assures Torres.

Likewise, the reform proposes the possibility of transforming any company into a Simplified Stock Corporation, facilitating mergers between SAS when one holds 90% of another SAS, which can be a very practical strategy for restructuring within business groups.

Finally, the general rule for resolving conflicts between shareholders, shareholders and the company, shareholders and directors or liquidators, and company and directors is mentioned. At this stage, our partner suggests Direct Settlement (special mediation and arbitration). In case of no reconciliation, recourse is made to the courts.

“Rules for expedited dissolution are also contemplated if there are no pending obligations, duly evidenced by a public accountant or external auditor, following the process established in the Commercial Code,” concludes our lawyer.