Dominican law recognizes different types of corporate structures and business forms, and sets forth a gen- eral framework that may be used by the parties to regulate everything from an entity’s name, capital, and transfer provisions to the administration and supervision of these entities, decision making, and dissolution. While there are business forms that are based in the identity of the owners (intuito personae) these are rarely used, and investors usually prefer corporate vehicles that limit their liability to the amount of their investment, except in case of fraud were distinction would not apply and the piercing of the corporate veil is likely to occur. The most common business forms are:
CORPORATION
Corporations (sociedades anónimas) are entities with a legal existence formed by two or more partners who only assume risk of losses up to their capital contributions. For this reason, it is one of the most popular forms of business organizations. Corporations may or may not seek funding from the securities markets as a form of financing and expansion of their operations. If they do so, they will be required to obtain an authorization from the Dominican Repub- lic’s Securities Superintendent. Capital and Transfer Provisions: Corporate capital is represented by shares, which are essentially negotiable. The minimum authorized corporate capital is RD$30,000,000.00 and 10% of such amount must be paid and outstanding. The law does not establish any restriction on the assignment of shares. Nevertheless, it pro- vides that shareholders may agree to restrictions, so long as they do not contain any permanent prohibition on the transfer of shares. Administration, Supervision, and Decision Making by Shareholders: A board of directors composed of a min- imum of three members is normally in charge of managing these companies. Legal entities may not serve as president of a corporation. In terms of supervision, the law establishes that corporations must be supervised by one or several vigilance officers that are named for two fiscal periods and are primarily appointed to veri- fy the annual accounts presented by the board of directors and the documents addressed to the shareholders indicating the annual accounts and financial situation of the entity. In addition, corporations that seek funding from the securities markets are subject to the supervision of the Securities Superintendent during the formation and organization process, as well as in all corporate actions relating to amendments to bylaws, the issue of negotiable titles, transformation, and liquidation.