Corporate Law at Venezuela
Here’s a concise overview of Corporate Law in Venezuela:
⚖️ Legal Framework
Commercial Code of Venezuela:
The main source governing commercial and corporate activities, including company formation, governance, and dissolution.
Law on Commercial Companies (Ley de Sociedades Mercantiles):
Specific rules regulating different types of commercial companies.
Securities Law (for publicly traded companies).
Civil Code and other relevant statutes may also apply.
🏢 Types of Business Entities
Sociedad Anónima (S.A.)
Similar to a joint-stock company or corporation.
Limited liability for shareholders.
Minimum capital requirement, often divided into shares.
Suitable for larger enterprises and publicly traded companies.
Sociedad de Responsabilidad Limitada (S.R.L.)
Limited liability company with fewer shareholders (max 20).
Shares are not publicly traded.
Common for SMEs.
Other types:
Partnerships (Sociedad en Comandita)
Sole proprietorships and civil companies.
📑 Company Formation
Name Reservation with the National Registry of Commerce.
Public Deed of Incorporation before a notary.
Registration with the Public Registry of Commerce.
Obtain Tax Identification Number (RIF) and register for tax purposes.
⚖️ Corporate Governance
Governing Bodies:
General Shareholders Meeting (highest authority).
Board of Directors or Sole Administrator.
Directors’ Duties:
Fiduciary duties include loyalty, diligence, and acting in the company’s best interest.
Reporting:
Annual financial statements must be prepared and filed.
💼 Foreign Investment
Foreign investors can incorporate companies but must comply with Venezuelan foreign investment regulations.
Certain sectors are restricted or require government authorization.
The National Center for Foreign Investment (CENIEX) regulates foreign investment policies.
💰 Taxation
Corporate Income Tax rate is generally around 34% (includes income tax and surcharges).
Other taxes: VAT, municipal taxes, social security contributions.
⚠️ Current Considerations
Venezuela has experienced economic instability and currency controls, affecting business operations.
Compliance with exchange controls and reporting to the government is mandatory.
Legal and regulatory environment can be complex; professional advice is recommended.
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