Company Transformation Question (2017)

POP Bad Boy

Bronze
Jun 27, 2004
984
30
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Would like some opinions on this matter on behalf of a family member.

Situation: 2017

One S.A. Company that holds title to a house in the Dominican Republic.

The company was never transformed previously and is now in the process of being done.

Current ownership by an American as President with 1 share, 5 other Americans with one share (all relatives of the President and were there for name only since it was previously required), and One Dominican with MOST of the shares. (Situation was so the President could control the property so that it would not be sold by the Dominican MAJORITY owner for her own protection/future).

CURRENT intention is to transform the company as required a while ago, and while doing so, all the Americans are "selling" their one share to the Dominican. The President wishes to somehow keep control until he passes but doesn't want share ownership which would complicate matters upon death.

The Attorney/Accountant want to transform the company to an IERL and have the current president be appointed the manager for a period of 6 years with no ownership.

It seems to me that the IERL is for a single owner, (which is going to be the Dominican) and that even though the president would be the "manager / administrator" that the president could change that person anytime they want..............and WHY would there be a 6 year appointment??

ANY THOUGHTS would be appreciated. Thanks!
 

windeguy

Platinum
Jul 10, 2004
34,633
1,973
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I have one "thought question". Are the advantages of keeping the house in a company as valuable as they once were? Many advantages have disappeared as well as some tax disadvantages appearing over time. Does it still make sense to keep the house in a new company and pay for what that will cost?
 

POP Bad Boy

Bronze
Jun 27, 2004
984
30
0
I have one "thought question". Are the advantages of keeping the house in a company as valuable as they once were? Many advantages have disappeared as well as some tax disadvantages appearing over time. Does it still make sense to keep the house in a new company and pay for what that will cost?


NOT really sure, but I think if you were to take the property OUT of a company, you have fees associated with that also.
 

Fabio J. Guzman

DR1 Expert
Jan 1, 2002
2,310
116
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www.drlawyer.com
Apparently, the structure was not properly thought out from the beginning. If you (the American) are the real owner, holding the presidency does not prevent the nominee shareholder (the Dominican) from holding a meeting, changing the president and selling the property. The same holds for the new structure (a EIRL); the owner of the EIRL can change the manager at will even if originally designated for six years.