Requirements to Create a Limited Company: Steps, Deed and MORE

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Here are the Requirements to Create a Limited Company, which must be recorded in order to start operating. To undertake, you must have defined what type of company you want to establish.

We invite you to continue reading this article, since you will also learn about the steps to follow to create a Public Limited Company. Also on the Deed of Incorporation, the legal aspects to take into account, and other information of interest for the Company to be successful.

What are the Requirements to Create a Limited Company?

The first thing to know is that a Public Limited Company is made up of at least two (2) partners or shareholders. Now the Requirements to Create a Limited Company they are mentioned here below:

As a first requirement, the letter or the deed of Constitution of the Company must be presented, managed by the members of this. Here the following requirements must be completed:

  • General by Law of the grantors and attach the copy of the Nicaraguan identity card or the copy of the passport if they are foreigners.
  • The name and domicile address of the Company.
  • The activities and operations that the Company will carry out according to its capital.
  • Number of Directors and positions (for this there is no specific amount).
  • Capital stock, the number of shares and their amount according to the guidelines of the partners. There is also no minimum capital, however, a capital is suggested not less than 100,000 cordobas. It is not required to consign a deposit, only it must be stated that this is paid at the moment of registration.
  • The duration of the Company must not exceed 99 years.
  • Appointment of the Legal Representative or President and the functions that they will exercise within the Company.
  • Establish the percentage amount to obtain a quorum and make decisions in the General Assembly or the Board of Directors.
  • The members of the Board of Directors have the right to transfer or not the shares. In any case, if the Company is to have authorization to obtain its own shares.

Another of the Requirements to Create a Limited Company, is the Public Mercantile Registry.

Steps to Follow to Create a Limited Company

Once you have the Requirements to Create a Limited Company, the following steps must be followed to create it:

  1. The first thing to do is Deed of Incorporation of the Company and the states of this. Followed by this, process the Mercantile Registry with the respective inscriptions.
  2. Then go to the office of the DGI (General Directorate of Income). It is there where the registration of the Company is formalized in front of the Tax Authority as a taxpayer. Therefore, the RUC (Unique Taxpayer Registry) is received.
  3. Continuing with the process, we proceed to carry out the inscription in the Municipal Mayor’s Office pertinent, of the locality where the physical office is located.
  4. In the event that export operations are carried out or articles are transferred. Registration must be made at the General Customs Directorate.

Deed to Create a Corporation

Besides being one of the Requirements to Create a Limited Company. For the writing of this, some requirements and norms must also be met. Previously, the reference to this point and what must be complied with in order to carry out said procedure was mentioned.

Data Contained in the Deed of Incorporation of a Public Limited Company

Among the information that the Deed of Incorporation has is the following:

  • Name, surname and age of the grantors, in the case that they are natural persons, the name or company name. In the case of being legal persons, and in any situation and the domicile address.
  • The disposition of the grantors to create a Public Limited Company.
  • Money, rights and assets with what each of the partners contributes. Indicate the title in which it is carried out and the amount of pertinent actions in the payments.
  • The entire amount, at least close to the constitution consumptions. Also those already covered and those already consented until the Company is incorporated.
  • Rules that guide activities of the society.

Legal aspects

In reference to the legal aspects that have to do with the Public Limited Company, in the first instance Articles 201 and 202 of the Commercial Code of the Republic of Nicaragua, defines what a Public Limited Company is. Likewise, it refers to those responsible for this, the amount of the shares, the revocation of the administrators, etc.

In the same way, it contains other Articles that mention other important aspects that include the Corporation and are mentioned below:

Article 203: The regulations detail the functions relevant to the Board of Directors, the General Meetings (ordinary or extraordinary), and the Vigilance Board. Where some rules are stipulated, such as for example that the administration is optimal, the supervision of the performance of the managers.

Also, the right that the partners have to know, in which the funds for social works are used, the number of partners that the Society has and the contribution of the capital with which they must contribute in the meetings is established. In turn, the reduction or increase of capital or when the Company is dissolved or modified.

Article 204: If the regulations and social writing do not appear in the Mercantile Registry respective, the Corporation cannot enjoy legal personality. Both documents must be published in the Official Gazette or in La Gaceta. If this is not taken into account, it only affects companies created by public subscription.

Article 205: The aforementioned regulations or writing will not be registered, if the conditions mentioned below are met:

  • When the creators are unprecedented in good standing.
  • In the event that the deed is not stated in accordance with Article 124.
  • When there are regulations adverse to the Law, Constitution, morality and public order.
  • If the regulations is not admitted according to plan in the articles of incorporation, or modifications in matters of importance, or contrary to it.
  • When the regulations do not stipulate a Law that provides the functions of managers, and the right to know the use of social resources.

Other Articles of Importance for the Constitution of a Public Limited Company

Article 206: If the Corporation does not have half of the share capital, 10% in cash that corresponds to said capital. It cannot start its activities.

Article 207: The offices that the Company establishes must be registered in the Commercial Registry in the corresponding department. For this procedure, the registered social contract and the appointment of the office manager must be consigned.

Article 208: The domicile address of a Public Limited Company and that of their offices that are created. This can be modified by notifying the public 15 days in advance, and registering the new address.

Article 209: In the event that a Public Limited Company is granted a type of benefit for its expansion, it is subject to the registration of the deed in advance. Also its regulations and the admission of the Executive.

Article 210: The only authority that can determine variations in the social contract is the General Meeting. The call to the partners must justify the purpose of the session. In it the plan of modification is made known in its important matters.

To obtain more details about the legal aspects of the creation and operation of a Limited Company, you can enter this link, where you will find extended information.

What is it?

The Public Limited Company is a type of Commercial Company. Which is made up of a group of partners which are in charge of this and are limited to capital that each one has provided. The creation of a Limited Company is for profit. Any investment can advance in such a way that it becomes a great Company.

The objective is to obtain economic benefits, which provide financial security to the Company. Once the Company has been established, it must publicly communicate its classification. Therefore, within the factors determined by law, it is essential that “SA” or “Sociedad Anónima” is always indicated by its initials.

In such a way that, the creation of a Public Limited Company can be considered under Nicaraguan Laws. On the other hand, this can be constituted by public subscription. For this, the following is required, according to what is stipulated in the Article 216 of the Commercial Code of the Republic of Nicaragua:

  • Publish the program.
  • The capital register.
  • The holding of the General Meeting that admits and corroborates the constitution of the Public Limited Company.
  • Formalization of the minutes of the General Meeting of constitution.
  • Record of certification of the relevant writing, where it is established that the publication was made, which corresponds to subsection 2. of Article 204. This is found in the reform of the Law of July 31, 1941, Gazette No. 29.

If the idea is to have financial independence, gather the Requirements to Create a Limited Company. This in order to obtain the necessary dividends to grow both personally and business.

After gathering the Requirements to Create a Limited Company, comply with the steps to follow to properly establish it and start your business.

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