Simplified joint-stock companies (known in Spanish as “SAS”) were introduced in 2019 through the Law for the Promotion of Entrepreneurship (No. 19.820). This company type was incorporated into our legal system to keep pace with the development of current markets, following the model of other Latin American countries such as Argentina, Colombia, Chile, Ecuador, and Peru.
It is important to note that the Law on Commercial Companies (No. 16.060) has been in force for more than 30 years and has never undergone significant amendments to bring it in line with the requirements of modern markets.
The main features that distinguish the SAS from other corporate forms are:
- It may be incorporated by a single person; no partners are required, unlike in the case of LLCs.
- The incorporation process was designed to be fast, simple, and less costly. During its first two years of implementation, however, no substantial improvement was observed in incorporation times, even though this was a clear impact of the pandemic.
- The parties have freedom regarding the drafting of the bylaws and the operation of the company.
- The corporate purpose is unrestricted: it may involve any lawful commercial or civil activity.
- Shareholders’ liability is limited to their contributions, and they are exempt from liability for the company’s labor and tax obligations.
- The share capital is represented by registered shares, and it must be fully subscribed or paid in at the time of incorporation. At least 10 % of the capital must be paid in if the contribution is in cash, and 100 % if it is made in kind.
- In the case of a single shareholder, that person may exercise all powers granted by law to corporate bodies.
- There is full flexibility in management and representation, and the minimum required position is that of a Legal Representative.