Costa Rica: Types of Company
The stock corporation (sociedad anonima) is the most popular form of business organization and has the following characteristics:
- It must have 2 subscribers at the time of incorporation; thereafter a single shareholder is permitted; corporate shareholders are permitted;
- Shareholder meetings must be held annually and can be held anywhere in the world provided that provision is made for this in the articles;
- There is no minimum share capital requirement, however at least 25% of the issued capital must be paid up on incorporation;
- Shares of no par value and bearer shares are not permitted; preference and deference shares are permitted;
- The stock corporation must have a registered office, a fiscal agent, a resident agent (who is a local lawyer) and a minimum of 3 directors (resident or non-resident) one of whom (the President) has power to manage the company; directors' meetings can take place anywhere if the articles pemit it.
The President is assisted by a secretary and a treasurer and unlike a common law jurisdiction his authority to act on behalf of the company comes through the issue by the shareholders of a power of attorney in his favor which defines what he can and what he cannot do. The fiscal agent is basically an accountant and his duties are to keep an eye on the board of directors and to report directly to the shareholders. The fiscal agent and his immediate relatives cannot be the directors.
These requirements are burdensome by the standards of offshore common law jurisdictions and have the effect of pushing up the administrative costs of a stock corporation. Three sets of minute books and accountancy records must be maintained. One set is for the use of the directors, one is for the shareholders and the third must be kept in the registered office.
Reporting requirements are minimal. The company must file a tax return irrespective of whether it is liable to pay tax on its income.
Incorporation is relatively quick for a civil law jurisdiction, taking some 4 weeks in all. Since stamp duty is payable on issued share capital the practice is to keep the value of issued share capital low thereby keeping the costs of incorporation to a minimum.