Set up a corporation in Costa Rica: ☎️ What are the legal books?
When you open business in Costa Rica, you will want to do it through a corporation. When you form a corporation, you will receive two things: shares (or quota certificates), and the corporate “legal books.” You receive “shares” if you constitute a standard corporation. On the other hand, you will receive “quota certificates” if you create an LLC. To summarize, when you set up a corporation, you will receive both the legal books and the shares (or quotas.) These documents are extremely important, when you open business in Costa Rica.
Corporate books are a crucial component of the legal and administrative framework that governs businesses in Costa Rica. These books are a set of documents that companies must keep to comply with various legal and regulatory requirements. You need them to operate the company. They contain vital information about the corporations, such as shareholder information. They also include the agreements the shareholders have made, including changes to the articles of incorporation. Therefore, legal books are essential tools companies and businesses in Costa Rica need to have in order.
Legal books if you set up a Standard Corporation (S.A):
If you open business in Costa Rica, as a Standard Corporation, these would be the legal books you must have:
In a Standard Corporation, or “S.A.,” this book is called the Book of Shareholders. This book is significant as it shows who the corporation’s shareholder is. In addition, there is a commercial principle called “Double Intestation.” To be reputed as such, a shareholder must have the physical shares to his name and be registered as such in the shareholder ledger. This is one of the essential legal books you receive when you form a corporation in Costa Rica.
Book of Shareholder´s Acts:
Shareholders must have annual meetings to discuss corporate issues. These meetings are held in “assemblies”. Assemblies are convoked through customary means, and if this is not possible, they must be convoked in the Costa Rican Gazette. Everything that transpires in these assemblies, is recorded in the Book of Shareholders. Shareholder assemblies can be ordinary, or extraordinary. Ordinary assemblies are convoked once a year, to vote on the subjects that are outlined by article 155 of the Costa Rican Commerce Law. I would say that this legal book, is the second most important one you receive, when you form a corporation in Costa Rica.
Book of Board of Directors:
This book contains all the minutes from the board of directors’ meetings. The board of directors is an important organ of the Standard Corporation.
If you set up a corporation, as an LLC, these are the books you will need in Costa Rica:
The book of quota holder´s meetings:
This book is for the LLC, as the book of shareholder´s acts is for the standard corporation. It has the same purpose. The quota holders hold meetings, and write their acts and votes on this book. Changes to the company´s object, and changes to the articles of incorporation, that add responsibility to the quota holders, can only be done by unanymouse votes. For any other type of by laws modifications, votes must be of three quarters the capital present.
The quota holder´s ledger:
This book is to the LLC, as the book of shareholders is to the standard corporation. It´s a registry of who the quota holders are, and their ownership percentage of the business.
Who keeps the books of your business?
If the business is under a standard corporation, the books are kept by the secretary of the board of directors. If it´s under the corporate umbrella of an LLC, then the manager usually keeps the books. It´s not unusual however, to have your attorney keep them for you. Law firms usually charge a yearly fee for these legal services.
Why are the corporate books so important when you form a corporation?
Legal books are crucial for your business in Costa Rica. If you want to modify your corporation’s bylaws, you will need them. Domicile changes, legal representation, and even changing the name of your corporation require the corporate legal books. They are even needed for banking purposes. When you open a bank account in Costa Rica, the banks will ask for notarized certifications of who the shareholders are. You must provide the shareholder´s legal books to the notary public for this.
The legal books are important because they show who the shareholders are. They also contain the minutes of the Board of Directors (Governance) and the shareholders’ decisions. Minutes in Spanish translate to “Actas,” which are “acts.” Making significant changes to corporations is impossible without books.
Do you provide the legal books as part of the service?
Yes. When you hire us to set up a corporation in Costa Rica, we will do several things. First and foremost, we will incorporate the business in the Public Registry. Then, you will receive the shares (or quotas if you do an LLC.) Lastly, we will create the legal books for you, fill in all the necessary information, and hand them to you. These legal services are included in the corporate package.
Can I make corporate changes after I set up a corporation?
Once you open business, you can definitely change the corporate structure. A shareholder assembly must vote on it. For example, say you wish to change the board of directors. In that case, the shareholders vote on it and on who the replacements will be. The minutes of this assembly is written in the books. You then take the books to a notary public, and he will protocolize it. He will then register the protocolized document in the Public Registry, where the changes occur.
Dr. Christopher Pirie Gil.
Law offices in San José, and Guancaste.