Corporations in Chile can be Publicly-held Corporations, Closely-held Corporations, Simplified Corporations, Limited Liability Companies, Individual Limited Liability Companies and Collective Associations.
That being said, the most recommended corporations to make business in Chile are Publicly-held Corporations, Closely-held Corporations and Simplified Corporations:
2.1- Publicly-held Corporations and Closely-held Corporations:
Publicly-held Corporations are intended for those companies in Chile that have 500 or more shareholders or at least 10% of those shares belong to 100 shareholders and to those companies willing to publicly trade their shares.
This kind of companies have special obligations and are both regulated and supervised by the Chilean “Superintendence of Securities and Insurance”.
Simply, Closely-held Corporations are those who are not Publicly-held. Both of them are ruled by the following regulations:
Incorporation: They are incorporated by a public deed by at least two incorporators. This can be done via a Written or Electronic Registration System, and certain minimum legends are required by law to be included.
Capital: Must be paid within three years from the execution of the incorporation deed, or according to what it’s stated on the company by-laws. Later, it can always be increased or reduced by executing an amendment.
Liability: Shareholders are accountable for the value which their shares represent.
Transfer of shares: Shareholders can transfer their shares without limitation, but the ones written in the by-laws (closely-held corporations only). To be effective to third-parties, the transfer of shares must be annotated in a shareholders registry.
Dissolution: Corporations are usually dissolved when its duration expires, unless its incorporated to perpetuity. Also the company by-laws may define certain cases in which dissolution is applicable. Yet, there will be “legal-dissolution” in certain cases, such as if it’s agreed by 2/3 of the shareholders or if the company is merged into another one.
Management: A “Board of Directors” must be chosen by the shareholders to manage the corporation. Then the board can delegate its authority to a General Manager entrusted to act according to the Board of Directors and have the judicial representation.
2.2- Simplified Corporation or Single-Share Corporation:
This corporation is similar to the Closely-Held Corporation, yet it has less formalities and administrative limitations, being preferred by entrepreneurs and small to medium institutions. Also, one of the greater differences is that it can be incorporated by only one shareholder.
Another distinctive difference is that the management of Simplified Corporation is freely stablished in the company by-laws. Therefore, the administration can choose between a board of directors, committee, sole administrator, etc.