Gesellschaften in Chile

The three most important legal forms of business entities in Chile are:

1.                  Limited liability company ("LLC"), in Spanish "sociedad de responsabilidad limitada".

2.                  Stock corporation ("SC"), in Spanish "sociedad anónima".

3.                  Registered branch of a foreign stock corporation ("Branch"), in Spanish "Agencia".

1. Limited Liability Company

An LLC is formed by the execution of the charter agreement between the partners by public deed before a Chilean Notary Public. The formation process takes approximately 15 days from the execution of the public deed. Foreign partners have to appear with the corresponding powers of attorney duly legalized up to a Chilean Consul. The main characteristics of a LLC are the following:

· There must be at least two partners who may be either Chilean or foreign, individuals or companies.

· The liability of the partners is limited to the amount of their capital contributions.

· No minimum capital is required;

· The timing for capital contributions is fixed in the charter agreement; and

· The rights of the partners are personal and as such cannot be incorporated in negotiable titles.

There is a great flexibility in the provisions that can be included in the charter agreement.  The establishment of a LLC requires no governmental approval and LLCs are not supervised by any state entity aside from the Internal Revenue Service. Financial statements of LLCs are not published.

The public deed that creates a LLC must express: (1) the name and domicile of the partners; (2) the name and purpose of the LLC; (3) the system of management; (4) the amount of capital contribution and form of payment of each partner; (5) the liability of the partners limited to the amount of capital contributions; (6) the form of distribution of profits and losses; (7) the date when the LLC is to begin and end; (8) liquidation and arbitration procedures; (9) the domicile of the company. An abstract of the [ENDE DER VORSCHAU]