Use Of Company

HIRAM

Member
Mar 19, 2005
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Hi all,

I bought my appartment on my DR companies name.
I want to buy a car, do I have to buy that car on the name of my company ?
My lawyer advices me to set also my dominican bank accounts on my companies'name.

What are your thoughts about it ?

Many thanks !
HIRAM
P.S. I am not english spoken, so forgive me.....
 

J D Sauser

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Nov 20, 2004
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Not legal advice... but:

Here are two reason why I would not do it:

1.) If I registered your house/apartement on a company, I personally would not register a vehicle on the same company because liability might arise from some incident with the car and the property or any other assets may be affected. In other words, I would like to keep any risk of liability away from the property... this is why I would have incorporated in the first place.

2.) People who keep real estate on companies tend to keep them as "clean" and worry free as possible. Keeping them away form liability issues being one reason for the practice, a clean company dedicated only to one piece of real estate also has the additional advantage to offer the possiblity to be sold all together with it's asset (in that case the mentioned property), herewith bypassing many fiscal transaction costs. But then, I do not know if that is comon practice in the DR.
(That being said, may I add on a side note, that I would be very cautious about buying an existing company because one not only buys the company's assets but also any pending liabilities even those not disclosed before!)

About the bank account: Some coutries' legislation requires a company to have a bank account in it's name... not just because companies do not have purses and pockets ;) . Usually some sort of formal accounting has to be filed with the authorities too, but again, I do not know how that is handled in the DR. Anyway, It makes things easier: You can "loan" money to your company... then that company will use that money to pay maintenance, phone and utility bills etc and other side handle any income from rental and so forth. In some cases VAT (sales tax can be balance out... but check that with your Dominican accountant!).

Anyway, this is in no way intended to be legal advice to you or anybody, it is just my personal opinion.

... J-D.
 

HIRAM

Member
Mar 19, 2005
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Thank you Mr. Sauser.

To register a car on the company : I thought the driver is responsible and not the owner.

Bankaccounts on the company : to protect the assets and it is taxfriendly in case of the dead of the asset holders.

I think about it.

Hiram
 

J D Sauser

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Nov 20, 2004
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I do not know the specific laws of the Dominican Replublic and you may be well advised to re-post your question on the "Legal" Forum.
However, some countires are more or less clear about this: A car is not a person, so it can not be held responsible. The driver for one is, when identificable and of legal age, in most cases penaly liable (driving under the influence of, wreckless driving, bracking laws and disrespecting street regulations and so forth). However for liability, the car holder (on the registration) will in most countries be considered liable for damage and is thus the one who buys insurance. some countries have unlimitted liability coverage some don't. In those who don't the the holder of the registration (who I may ad is not always "owner" or holder of title) can be held responsible for libility claims exceeding coverage.
To give you an example to explain my line of thinking: I park my car somwhere. It get's stole by some kids and they wreck the car in a accident, causing dammage to XYZ. The kids would be penaly liable for steeling a car, driving without a license, wreckless endangerment/driving and so forth, IF they get caught. MY insurance would most likely face a claim to pick up a part of the third party dammage check but only up to the max coverage. Guess who will be made responsible for the rest?? This may seem a hairraising story... but it happens quite often.

Again, I do not (yet) know how this is handled in the DR. But which ever way it may be, I maintain that I would not mix up things. I put a piece of real estate on a company to alienate it from anything that may affect me dirrectly or so anything with the piece of realestate won't affect me dirrectly either. I'd want to do the same thing with my vehicles, I'd do it on (a) different company/ies.

... J-D.