Sociedad Anónima (S.A.): Structure, Formation, and Operations
A Sociedad Anónima (S.A.) is a legal entity with capital divided into nominative shares, where shareholder liability is limited to their contributions. It requires "S.A." in its name and accepts only money or goods as contributions. This corporate structure facilitates capital raising and limits individual financial risk, making it a common choice for larger businesses.
Key Takeaways
S.A. limits shareholder liability to their capital contribution.
Capital is divided into shares, transferable and representing ownership.
Constitution can be simultaneous or through public offering.
Key organs are JGA, Board, and Management for governance.
Special forms like S.A.C. and S.A.A. cater to different needs.
What are the general provisions defining a Sociedad Anónima (S.A.)?
A Sociedad Anónima (S.A.) is a legal entity with capital divided into nominative shares. Shareholder liability is limited to their contribution, typically requiring a maximum initial disbursement of 25%. The company's name must include "S.A." to identify its legal form. Contributions are restricted to money and tangible goods, explicitly excluding services. This framework provides a clear legal and financial foundation, emphasizing capital structure and limited risk for investors.
- Defined as a legal entity with capital divided into nominative shares.
- Company name must explicitly include "S.A." for legal identification.
- Shareholder liability is limited to their capital contribution, with initial 25% maximum.
- Contributions are limited to money and goods, excluding services.
How is a Sociedad Anónima (S.A.) legally constituted?
Constituting an S.A. occurs via two paths: simultaneous or by public offering. The simultaneous method involves founders subscribing and integrating all capital in one act for swift establishment. Public offering is a successive process, initiated by a program and concluding with an Assembly of Subscribers, allowing broader capital acquisition. Founders may hold special rights for up to ten years. Onerous acquisitions from founders within two years require JGA approval, ensuring transparency.
- Simultaneous constitution: All capital subscribed and integrated in one act.
- Constitution by public offering: Successive process ending with Subscribers' Assembly.
- Founders may possess special rights for a maximum of ten years.
- Onerous acquisitions from founders within two years need JGA approval.
What is the nature and function of shares in a Sociedad Anónima (S.A.)?
Shares in an S.A. represent fractional ownership of the company's capital. Each voting share typically grants one vote, though non-voting shares exist. Shareholders have a crucial right of preference to subscribe to new shares during capital increases, protecting their proportional ownership. For a share transfer to be effective against the S.A., it must be recorded in the Share Register. Shares can also be subject to encumbrances like pledges or usufruct.
- Shares represent capital ownership.
- Voting shares grant one vote; non-voting shares exist.
- Preferential right to subscribe new shares in capital increases.
- Transfers effective upon Share Register annotation.
- Shares can be pledged or usufructed.
Which governing bodies oversee the operations of a Sociedad Anónima (S.A.)?
An S.A. operates through distinct governing bodies for effective management. The General Shareholders' Meeting (JGA) is the supreme authority, responsible for major agreements, statutory modifications, and director appointments/removals. The Board of Directors acts as the collegiate administrative body, typically with a minimum of three members, providing strategic direction. The Management is the executive and legal representation organ, handling daily operations.
- Junta General de Accionistas (JGA): Supreme body for major decisions.
- Directorio: Collegiate administrative body, minimum three members.
- Gerencia: Executive and legal representation for daily management.
What types of modifications can a Sociedad Anónima (S.A.) undergo?
An S.A. can undergo significant structural and capital modifications through specific agreements. Modifying company bylaws requires a qualified majority vote from the General Shareholders' Meeting. Capital increases occur via new contributions or capitalization of reserves, strengthening the financial base. Conversely, capital reduction may absorb losses or return contributions, potentially activating creditors' Right of Opposition. These modifications allow the S.A. to adapt to changing business needs.
- Modification of Bylaws: Requires qualified majority JGA vote.
- Capital Increase: Via new contributions or reserve capitalization.
- Capital Reduction: Absorbs losses or returns contributions; may trigger creditor opposition.
How are profits and reserves managed in a Sociedad Anónima (S.A.)?
Profit and reserve management in an S.A. follows specific legal requirements for financial stability. An obligatory legal reserve mandates setting aside 10% of annual net profits until it reaches 20% of the company's capital, acting as a financial buffer. Profit distribution to shareholders occurs only from liquid and realized profits, after the General Shareholders' Meeting approves financial statements. This ensures transparency and protects solvency.
- Legal Reserve: Obligatory 10% of net annual profit until 20% of capital.
- Distribution: From liquid, realized profits after JGA approves financial statements.
What are the special forms of a Sociedad Anónima (S.A.)?
Beyond the general S.A., specialized forms exist: the Sociedad Anónima Cerrada (S.A.C.) and Abierta (S.A.A.). An S.A.C. has a maximum of 20 shareholders and an optional Board, offering administrative flexibility and a Right of Preferential Acquisition. An S.A.A. is for larger public companies, requiring over 750 shareholders or stock market listing, a mandatory Board, and SMV supervision for transparency.
- Sociedad Anónima Cerrada (S.A.C.): Max 20 shareholders, optional Board, preferential acquisition.
- Sociedad Anónima Abierta (S.A.A.): Over 750 shareholders or listed, mandatory Board, SMV supervision.
Frequently Asked Questions
What is the primary characteristic of shareholder liability in an S.A.?
Shareholder liability in an S.A. is limited strictly to the amount of capital they have contributed. This protects personal assets beyond their initial investment in the company.
Can services be contributed as capital to a Sociedad Anónima?
No, contributions to an S.A. are explicitly limited to money and tangible goods. Services are not accepted as a form of capital contribution.
What is the purpose of the legal reserve in an S.A.?
The legal reserve is an obligatory fund, accumulating 10% of annual net profits until it reaches 20% of the capital. It provides financial stability.
What distinguishes a Sociedad Anónima Cerrada (S.A.C.) from a general S.A.?
An S.A.C. has a maximum of 20 shareholders and an optional Board. It also includes a preferential acquisition right for shares, controlling ownership.
Who supervises a Sociedad Anónima Abierta (S.A.A.)?
A Sociedad Anónima Abierta (S.A.A.) is supervised by the Superintendency of Securities Market (SMV). This oversight ensures transparency and compliance for publicly traded companies.
