company and shareholders

claudius_2k

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Apr 10, 2003
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Hello , I was reading the forum for a while (nice forum and people :)), also looking in google, but I havent found more info than this, when incorporating a company, a minimun of seven shareholders is required, but after the minimun is only two:
"The Commerce Code prescribes that a company cannot be formed without having at least seven shareholders. Also, if at any given moment, all shares from the company are owned by only one shareholder, the company is automatically dissolved"

is this correct? does it means that a company can be owned by only two persons?


thanks
claudius
 

Fabio J. Guzman

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Jan 1, 2002
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Seven shareholders are required for incorporation (Art. 56 of the Code of Commerce). After incorporation, a company may be dissolved, at the request of any interested party, if a year has elapsed after the number of shareholders has fallen below the required minimum of 7 (Art. 57 of the Code of Commerce).

Since under Dominican law it is inconceivable to have a company (?sociedad?) of just one person, it is considered that a company dissolves automatically when all its shares become the property of one sole person.
 

claudius_2k

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Apr 10, 2003
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thanks for the responses, its ok if there are easy workarounds to do that :), I will look for more info as soon as I arrive to SD.



regards
claudius
 

monaco09

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Jun 4, 2003
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I cannot speak to the DR in particular, but in many countries there is an easy and common workaround to the number of shareholders.

You essentially hire your lawyer to be a shareholder, maybe his secretary etc. Create a buyback agreement. They can also act as nominee directors if necessary.

I am sure Mr. Guzman will know if this is done in the DR.
 

Escott

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Jan 14, 2002
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I formed 2 DR corps with 2 different Attorneys. Both places took care of all that had to be done. I even had letters of resignation from the other 6 provided by the attorney along with letters selling their share back to me. I also signed letters holding them harmless for my own stupidity. It is just a shell game. What is under the cup? Well nothing under that one! LOL

One attorney charged 20% more than the other one for the same thing. Just get a few names of attorneys in a particular area, ask about them to people you have met and think something of and interview the attorneys to see if you want to hire them. If you are on the North Coast I can recommend a few to talk to depending on what your needs are. Some are better at some things and some don't even do some things.

Regards,
Scott
 

claudius_2k

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Apr 10, 2003
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Thanks , I read something like that in some webs, and just wondered if it was correct and the only way.



regards
claudius
 

DCfred

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Jun 19, 2003
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"Paper companies" are well established in the Dominican Republic & many people have them to own investment instruments to avoid taxes. Usually the lawyer will tell you that you need x number of people, family members or close friends, with the number of shares and corporate offices divided. Downside: if one of the members goes rabid on you, just remember that in paper he/she owns part of the company.
 

Fabio J. Guzman

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Jan 1, 2002
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DCfred said:
" Usually the lawyer will tell you that you need x number of people, family members or close friends, with the number of shares and corporate offices divided. Downside: if one of the members goes rabid on you, just remember that in paper he/she owns part of the company.

Your attorney should never leave unprotected in this regard. You should have in your possession written acknowledgment from the nominee shareholders or nominee officers of their true status in the corporation.