S.A. (Corporation)

The S.A. is a limited company whose owners can be by virtue of a share in the share capital through securities or shares. Shares can be differentiated from each other by their different nominal value or by the different privileges attached to them, such as obtaining a minimum dividend. The shareholders are not liable with their personal assets for the debts of the company, but only up to the maximum amount of the capital contributed.

S.A. Classification

The S.A. can be classified according to different criteria. According to their source of financing, the corporation is classified as open or closed.

S.A. open

The S.A. open is one that resorts to the savings of the public in search of financing (issuance of negotiable bonds) or to constitute its founding capital (constitution by public subscription) or to increase it (public issue of shares). These can be given by:

• Stock exchange listing of shares and bonds: the company issues its value on the stock market to be financed through the purchase of shares and bonds.
• Constitution by public subscription: the company uses this method to integrate its founding capital, with this procedure the promoters and trustees appear.
• Public issue of shares: happens when the company already constituted by a single act, must increase its capital. If shareholders do not want to acquire these shares, then they can be offered to the general public. In this case, the society that was born closed will become open.

In the English language, this type of company is called a public company, that is, its capital is open to the general public, however, this can be literally translated as “public company”, falling into a kind of false friend, because in Spanish the word public in companies refers to that it is owned by the state. (Other names are also used in English, such as publically-traded company.)

S.A. closed

The S.A. closed is one that does not resort to public savings to form its founding capital or to increase it. In these companies, capital is nourished by the contributions that the founders integrate or subscribe when entering into the social contract. In other words, obtaining this capital is entirely private.

General meeting of shareholders

The general meeting of shareholders, also called the general meeting of shareholders is responsible, among other functions, for electing the directors of the company.

It is the meeting of the shareholders of the company and is the highest body of this. Before it may the shareholders act by themselves or represented by means of a power of attorney granted by public or private documents.

Company Directors

The S.A. needs to use an executive and representative body at the same time, which carries out the daily management of the company and represents it in its legal relations with third parties.

The structure of the administrative body of a company is one of the most important references in the statutes. In general, legal systems allow each company to organize its administration in the way it deems most convenient, does not impose a rigid structure and predetermines the administrative body and empowers the statutes to choose between several alternative forms.

The forms usually allowed are:

• Single administrator
• Several supportive administrators
• Two joint administrators
• A Board of Directors, also called a Board of Directors in some countries, or Board of Directors.
• Socioeconomic Administrator

Formation and incorporation of the S.A.

To proceed with the incorporation of an S.A., it is necessary to meet a series of requirements established by the respective legal system. These generally include, according to the specific legislation:

1. A minimum of partners or shareholders, and each of them subscribes a share.
2. A minimum share capital or subscription of the shares
3. The articles of incorporation of the S.A. with certain minimum mentions of this.

In some systems, public limited companies can be formed through a double practical procedure, specifically regulated by the different legal interests, and final incorporation of the company; through the constituent assembly, codes or commercial laws: Simultaneous Foundation and Successive Foundation.

• Simultaneous foundation: under this procedure the foundation of the company takes place in a single act in which all the founding partners concur, highlighting their desire to constitute an S.A..
• Successive foundation: the constitution of the company is based on different stages or phases, from the first steps taken by the promoters, to the initial subscription of the social shares by natural or natural persons.

Denomination

The name of the S.A. is usually formed freely, but it must necessarily be different from that of any other company and usually includes the phrase “Société Anonyme”, an equivalent or its abbreviation. For certain economic areas or social objects, it may be required to include a special denomination, such as “Bank” if the corporation has that turn. In the case of companies whose activities may only be carried out, in accordance with the law, by public limited companies; The use of the indication or acronym is optional. and so it is better understood

Denominations of the S.A. by country

• In almost all Spanish- and Portuguese-speaking countries: “Sociedad Anónima” (or “S. A.”), with local variations.
• In Argentina: S. A. “Sociedad Anónima” or S. A. C. I. “(Sociedad Anónima Comercial e Industrial)” S. A. C. I. F. (Sociedad Anónima Comercial Industrial y Financiera)
• In Germany, Austria and Switzerland: “Aktiengesellschaft” or AG
• In Belgium: “Naamloze Vennootschap” or N.V. / “Société anonyme” or SA
• In Bulgaria: Акционерно дружество, or АД
• In Bolivia: “Sociedad Anónima” or S. A.
• In Chile: “Sociedad Anónima” or S. A., which in turn is subdivided into: Sociedad Anónima Abierta (S. A. A.), and Sociedad Anónima Cerrada (S. A. C.). S. A. I. C. (Sociedad Anónima Industrial y Comercial) and S. A. C. I. (Sociedad Anónima Comercial e Industrial) are also used, although the reference to “commercial” is unnecessary, since according to the law, “the public limited company is always commercial, even when it is formed for the conduct of business of a civil nature“.
• In China: “股份公司” or Co. Ltd., which in turn is subdivided into: Open Joint Stock Company (无限责任公司), and Closed Joint Stock Company (股份有限公司).
• In Colombia: “Sociedad Anónima” or S. A. and “Sociedad por Acciones Simplificada” or S. A. S.
• In Costa Rica: “Sociedad Anónima” or S. A.
• In Denmark: Aktieselskab, or A/S
• In El Salvador: “Sociedad Anónima” or S. A., the most common being S. A. de C. V. (Sociedad Anónima de Capital Variable), as in Mexico)
• In Slovakia: akciová spoločnosť(a.s.)
• In Spain: “Sociedad Anónima”, S. A., or “Sociedad Anónima Unipersonal”, S. A. U.
• In the United States: Corporation, abbreviated most of the time (from Incorporated).
• In Estonia: “Aktsiaselts” or AS
• In Finland: “Osakeyhtiö” or Oy
• In France, Switzerland and Luxembourg: “Société anonyme” or SA
• In Guatemala: “Sociedad Anónima” whose abbreviation may be S. A.
• In Hungary, there are two types of joint-stock companies: “Zártkörűen működő részvénytársaság” or Zrt. (Closed joint-stock company) and the “Nyilvánosan működő részvénytársaság” or Nyrt. (Public limited company).
• In Italy: “Società per azioni“o Spa.
• In Japan: “株式会社” (kabushikigaisha)
• In Mexico: “Sociedad Anónima” or S. A., the most common being S. A. de C. V. (Sociedad Anónima de Capital Variable), and S. A. B de C. V (Sociedad Anónima Bursátil) Capital regime that companies listed on the stock exchange have to adopt by provisions of the Securities Market Law.
• In the Netherlands: “Naamloze Vennootschap” or N. V.
• In Paraguay: “Sociedad Anónima” or S. A.
• In Peru: “Sociedad Anónima” or S. A., which in turn is subdivided into: Sociedad Anónima Abierta (S. A. A.), and Sociedad Anónima Cerrada (S. A. C.). and the Ordinary or Traditional Public Limited Company.
• In Poland: “Spółka Akcyjna” or S. A.
• In Portugal: “Sociedade Anónima” or S. A.
• In the United Kingdom and Ireland: “Public limited company” or plc
• In the Czech Republic: “Akciová společnost” or a.s.
• In the Dominican Republic: “Sociedad Anónima” or S. A.
• In Romania: “Societate Anonimă” or S. A.
• In Russia: “Акционерное общество” or АО
• In Sweden: “Aktiebolag” or AB
• In Turkey: “Anonim Şirketi” or A.Ş.
• In Uruguay: “Sociedad Anónima” or S. A.
• In Venezuela: “Compañía Anónima”, “Corporación Anónima”, or C. A. (There is also Sociedad Anónima or S. A)

Regulation by country

Argentina

In Argentina, the corporation is regulated by Law 19,550 of Commercial Companies in articles 163 and subsequent (With the reform of the Civil and Commercial Code it was renamed “General Law of Companies Filed on February 15, 2022 at Wayback Machine.”), published in the Official Gazette dated April 25, 1972. Although important reforms have been introduced to date (the most notorious introduced by the publication of the new Civil and Commercial Code in 2015).

Being the S.A., the most rigorous corporate type is constituted by public instrument and by single act or by public subscription. Its share capital must be fully subscribed at the time of its incorporation and may not be less than ARS 100,000.

The governance of public limited companies is exercised by the shareholders’ meeting. Meetings are classified as ordinary (for drawing up balance sheets, appointment and removal of directors and trustees, increase of share capital to fivefold, etc.) and extraordinary (increase in share capital above five times; reduction of share capital; merger, transformation and dissolution of the company; etc.). Being a non-permanent body, it is convened by the board of directors or the trustee in the cases provided for by law, or when either of them deems it necessary or when they are required by shareholders representing at least five percent (5%) of the share capital. If the board of directors or the trustee fails to do so, the call may be made by the controlling authority or judicially.

It is managed by a board of directors composed of one or more directors appointed by the shareholders’ meeting or the supervisory board. If it is a corporation provided for in Article 299 of the “General Law of Companies Filed on February 15, 2022, at the Wayback Machine.” it must be composed of a minimum of three directors. Your period cannot exceed three years, however, you are re-eligible. It can only be removed by the assembly.

The director must act with loyalty and with the diligence of a good businessman. The liability of directors for misconduct of their duties, as well as for violation of the law, statute or regulations and for any other damage caused by fraud, abuse of powers or gross negligence is unlimited and joint and several towards the company, shareholders and third parties.

Corporations that comply with any of the cases of Article 299 (public offering of their shares or debentures; share capital exceeding ARS 50,000,000; exploit concessions or public services; etc.) are subject to permanent state supervision by the controlling authority of their domicile, during their operation, dissolution and liquidation.

In Argentina, the sole proprietorship can only be formed as a corporation, that is, as a company in which the capital is represented by shares and its main advantage is to allow any person to separate a part of their assets to dedicate it to a commercial activity without the risks of that commercial activity affecting all their assets, because his responsibility is limited to that portion he devoted to society. [1]

Public limited companies and sole proprietorships can register within 24 hours, when the application for registration is submitted as an urgent procedure.

Chile

In Chile, the corporation is regulated by Law 18046, published in the Official Gazette on October 22, 1981. This law has defined the S.A. as a “legal person formed by the meeting of a common fund, provided by shareholders responsible only for their respective contributions and managed by a board composed of essentially revocable members”. In addition, it always gives it the character of commercial, even when it has as its object some civil activity. The regulatory framework of Corporations in Chile is broader, since it includes several types:

• Open S.A.: those that voluntarily or by legal obligation register their shares in the Securities Registry.
• Special Open Corporation: Article 126 understands them as those companies that have a special regulation, in view of the nature of the activities they carry out, such as insurance and reinsurance companies, mutual fund management corporations, stock exchanges and other companies that the law expressly indicates as such. They must comply with a number of formalities:
  • They are formed, exist and approved by public deed
  • They need to obtain a resolution from the Superintendence that authorizes their existence
  • Registration and publication of the special certificate granted by said Superintendence.
• Closed Corporation: the one that does not qualify as any of the previous companies.
• Sociedad Anónima Deportiva Profesional: Also known as S.A.D.P. or simply SADP, under Article 1 of Law 20.019, are those constituted in accordance with said law, which have the purpose of organizing, producing, marketing and participating in sports events and that are incorporated into the Registry of Professional Sports Organizations administered by the National Sports Institute of Chile.

Colombia

“S.A. is a limited liability capital company, in which the share capital is represented by shares, and in which the ownership of the shares is separate from the company’s management. It is born for a specific purpose. The shareholders do not have rights over the assets acquired, but over the capital and profits of the same.

Characteristics

1. Minimum number of shareholders (Art 374).
2. Share capital (Art 375). The capital of the S.A. shall be divided into shares of equal value which shall be represented in negotiable securities.
3. Authorized, subscribed and paid share capital where we can see our article of validity of the decree of 1924

(Article 376). When the company is incorporated, not less than fifty percent of the authorized capital must be subscribed and not less than one-third of the value of each share of capital that is subscribed must be paid. When the authorized capital is disclosed, both the amount of the subscribed capital and the amount paid up must be indicated.

1. Denominación.La company name must be followed by the words “sociedad anónima” or the letters “S.A.”.
2. Rights of owners. Each share confers on its owner certain rights, including the right to participate in and vote in the deliberations of the general meeting of shareholders; to inspect the books and papers of the trader and to deal freely in shares unless the right of pre-emption is stipulated in favor of the company or the shareholders or both.
3. Shares
   1. The company’s shares may be ordinary or privileged.
   2. Shares not subscribed in the act of incorporation of the company and those subsequently issued by the company are placed in accordance with a previously prepared share subscription regulation.
   3. The company may acquire its own shares, if approved by the general meeting of shareholders, with the favorable vote of not less than seventy percent of the subscribed shares.
   4. The payment of the shares can be made with goods other than money, for which the corresponding appraisal must be made.
   5. Each subscriber of shares is issued a title or titles that justify their quality as such.
   6. Shares are freely negotiable, with exceptions.
4. Causes of dissolution. The company will be dissolved by the general causes of dissolution and by the special ones established for type of company, among which we have when losses occur that reduce the net worth below fifty percent of the subscribed capital and when ninety-five percent or more of the subscribed shares come to belong to a single shareholder.

Costa Rica

They are regulated by Law No. 3284 of 04/30/1964, called the Commercial Code, in its articles 17 paragraph d); 18 et seq. establishes the generalities of Companies.

Articles 102-200, specific regulation of the S.A.

Article 104. (a) There must be at least two partners and each member must subscribe to at least one share; b) That of the value of each of the shares subscribed to be covered in cash, at least twenty-five percent is paid in the act of incorporation; and (c) That in an act of incorporation the value of each subscribed share to be paid, in whole or in part, with assets other than cash is paid in full.

Article 105. The S.A. will be constituted in a public deed, by simultaneous foundation, or by public subscription.

El Salvador

Amendments: (29) Legislative Decree No. 641, dated June 26, 2008, published in the Official Gazette Number 120, Volume 379 dated June 27, 2008. Each of the types of commercial companies has its own features or characters that differentiate them from the others. According to the writer Agustín Vicente y Gella, they indicate that the corporation has the following characteristics:

1. It is constituted by an association of people, but this is mutable without them influencing the life of the social entity.

2. Its object is the exercise or exploitation of an industry “under its social signature”.

3. You have your own assets.

4. The participation of the shareholders in the social credit is represented by titles “shares, of equal value”. Economic and personal rights, in principle, are measured according to the former. Thus, the number of votes of each individual, in the General Assemblies and the right to divide, are graduated according to such participation.

5. Partners limit their responsibilities to the amount they are entitled to disburse in subscriber concepts. Dr. Lara Velado also characterizes public limited companies by the following motes: a) The share capital is represented by securities called shares that are an aliquot part of said capital, which as a general rule can circulate freely b) The administration of the company is in charge of the agencies determined by law and the social contract. The members of the bodies are elected by the members. c) As this company is only liable with its assets for social debts, the law subjects them to certain surveillance and control and requires the publicity of certain acts in order to protect the public with which they relate.

Spain

Spanish legislation is mainly included in the Capital Companies Law. The European public limited liability company is a type of S.A..

Guatemala

In Guatemala, there is a large percentage towards commercial companies of limited companies that are regulated by the Commercial Code mainly. According to this Code, there are five types of companies that can be incorporated: the general partnership, the limited partnership, the limited liability company, the S.A. and the limited partnership by shares. Recently, with the publication of the Securities and Merchandise Market Law, the possibility of setting up a new type of commercial company was created: the investment company.

S.A. in Mexico

In Mexico, the corporation is regulated by the General Law of Commercial Companies, published in the Official Gazette of the Federation on August 4, 1934. Companies in Mexico, in addition to being named by their regime, must also mention the variability of their capital; for that reason, public limited companies are often known as variable capital joint-stock companies (S. A de C. V.).

Panama

In Panama, the corporation is regulated by Law 32 of February 26, 1927.

Paraguay

In Paraguay, corporations are governed by the provisions of Law 1.183 of December 23, 1985, “Civil Code”, articles 959 to 1.012 and 1.048 to 1.159, as amended. Like any commercial company, they must also comply with the provisions of Law 1,034 of 1983, “Of the merchant” and its modifications.

In addition, Law 1.284 of 1998, “Securities Market” and its amendments, are applicable to public limited companies issuing open capital.

In 2017, Law no. 5895/2017 “Companies by shares” was approved, which eliminates the possibility of creating an S.A. with bearer shares having to be mandatorily nominative.

Peru

In Peru, the General Companies Law regulates the structure and operation of commercial companies. Among these it recognizes three types: the closed corporation with a maximum number of 20 partners and with restrictions on the circulation of shares; the open corporation whose shares are traded on the Stock Exchange is composed of many more shareholders as much as necessary to open a company, and the regular corporation is also known as S.A. (Sociedad Anónima).

Uruguay

In Uruguay, it is regulated by Law No. 16.060 on Commercial Companies, published in the Official Gazette on November 1, 1989.

Venezuela

In Venezuela, public limited companies are governed by the provisions of Article 201 No. 3 of the Commercial Code: “The S.A., in which the social obligations are guaranteed by a certain capital and in which the partners are not obliged except for the amount of their share”.

Dominican Republic

In the Dominican Republic, the corporation is regulated by Law 479-08 on commercial companies.

S.A. in Belgium

An S.A. is a company in which at least two shareholders are willing to invest capital in the company. In Belgium, the SA is mainly chosen as a form of company by large companies. It is also chosen by SMEs (small and medium-sized enterprises) to the extent that the securities of these companies can be bearer (but we are talking about removing this type of security) and that they are transferable. The personality of the shareholder does not play any preponderant role as opposed to partnerships such as general partnerships (SNC) or limited liability companies (SARLs). In principle, it has an unlimited lifespan unless otherwise stated.

Characteristics:

• the capital of a minimum amount of EUR 61 500 must be fully subscribed and paid up to ⁄₄with a minimum of EUR 61 500;
• the number of directors must be set at least 3 and their term of office may not exceed six years, but may be renewable;
• as it is a separate legal person, therefore from their own assets (liability of the partners limited to their personal contributions): obligation of a financial plan (440 C.com); in the case of a cash contribution opening an account in the name of the company and in the case of a contribution in kind, a report from a statutory auditor (444 Ccom) is required;
• deposit of the authentic instrument of incorporation (because it has been done before a notary) at the registry and publication in the Belgian Official Gazette;
• registration at the registry of the commercial court in the register of legal persons;
• for those who have a commercial activity: registration with the Crossroads Bank for Enterprises.

S.A. in France

An S.A. is defined in Book II, Title II, Chapter V.

It is a company whose main characteristics are as follows:

• the partners or shareholders are liable only within the limit of their contributions;
• It is composed of at least two shareholders. Before 2021, for companies whose securities are admitted to trading on a regulated market, the number of members could not be less than 7;
• the share capital must be fully subscribed;
• the minimum capital is €37,000 for the ordinary SA as for the SA making an offer of financial securities (L.224-2 C. Com.), the order of 22 January 2009 has, in fact, abolished the threshold of €225,000;
• the variability of capital is impossible without amending the articles of association;
• one (or more) auditors are appointed to audit the accounting management;
• shareholders can in principle freely sell their securities (or shares);
• SASP and SAS: SASP is a professional sports limited company (some football clubs are part of it) and SAS stands for simplified joint-stock company.

Morocco

The S.A. is defined by Law No. 17.95 on public limited companies.

It is a company whose main characteristics are as follows:

• At least 5 shareholders are required to set up an S.A..
• They can be natural persons or legal persons and may or may not be resident in Morocco.
• An S.A. must have a minimum capital of 300,000 dirhams
• Each S.A. must have an auditor
• Public limited companies making a public call for savings via the stock exchange must appoint at least 2 auditors
• In their report to the general meeting, the auditor(s):
  1. certify that the summary statements are regular and fair and give a true and fair view of the profit or loss of the preceding financial year and of the company’s financial position and assets and liabilities at the end of that financial year
  2. attach qualifications to the certification. They must state the reasons for this.
  3. or refuse the certification of accounts. They must state the reasons for this.
• The auditors of an S.A. making a public offering via the stock exchange may not certify the accounts for a period exceeding 12 consecutive years.
• An S.A. can be
  1. An S.A. with a board of directors
  2. An S.A. with a board of directors and a management board
• The board of directors or the supervisory board must be convened at least 2 times a year by their chairman
• In case of urgency or failure, the convening of the board may be made by the auditor.
• The Management Board shall deliberate validly only if at least half of its members are actually present.
• Any agreement between an S.A. and one of its directors must be subject to the prior authorization of the board of directors.
• The board of directors of an S.A. has a minimum of 3 members and a maximum of 12 members
• The law increases this figure to 15 members when the company makes a public offering;
• The board of directors or supervisory board of an S.A. offering savings via the stock exchange must consist of at least 30% of members of each sex. The above number must reach 40% by January 1, 2027, at the latest.
• General meetings of shareholders are ordinary or extraordinary.
  1. The extraordinary general meeting alone is empowered to amend the statutes of the S.A.. It shall be validly deliberated only if the shareholders present or represented possess at least, on the first notice, 50%, and, on the second convocation, 25% of the shares having the right to vote. It decides by a majority of 2/3 of the votes of the shareholders present or represented.
  2. The ordinary general meeting of shareholders takes all general decisions.
• The ordinary general meeting must be held once a year. It is convened by the board of directors or the supervisory board, or if the board fails, it is convened by:

• 1. The auditor(s)
  2. a representative appointed by the president of the court
  3. liquidators.
• The agenda of a meeting is prepared by the person calling the meeting
• One or more shareholders representing at least 5% of the company’s capital may require the inclusion of one or more draft resolutions on the agenda. When the share capital of the company is greater than five million dirhams, the amount of capital to be represented to require a resolution is 2%.

S.A. in Canada

Quebec

Under the Civil Code of Lower Canada, an S.A. was one of the four types of partnership provided for in article 1864 C.C.L.C.. When the Civil Code of Québec came into force in 1994, public limited companies automatically became joint ventures. The equivalent provision in the new Civil Code is Article 2188 C.C.Q.

Switzerland

A Société Anonyme (SA) is one that is formed under a company name, whose share capital is determined in advance, divided into shares, and whose debts are guaranteed only by the company’s assets.

The Swiss limited company (German: Aktiengesellschaft, AG; Italian: società anonima) differs slightly from its French namesake. The rules of the SA are mainly found in the Code of Obligations and are summarised on the website of the Confederation.

• The S.A. is a legal person, subject to rights and obligations, which is solely liable for the company’s debts from its assets;
• Shareholders and participants are not jointly and severally liable for social commitments;
• Shareholders are only liable for the liabilities of the issuing company up to the value of their financial contribution (nominal value of the share);
• There is only one type of AS;
• Since 1 January 2008, the SA can be founded by a single shareholder/founder (previously: at least three founders);
• The share capital is determined in advance as well as the shares of which it is composed;
• Its share capital may not be less than 100,000 Swiss francs and it is divided into shares with a nominal value of at least 0.01 Swiss francs (one cent) each;
• Actions can be of two types:
  • Registered shares: shareholders can normally freely dispose of their shares. The articles of association may, however, provide for restrictions on transferability and shareholders must then require the approval of the board of directors. In addition, shareholders may enter into shareholders agreements with each other imposing certain obligations on them. The SA keeps a register of registered shares, with the names and addresses of the shareholders, as well as the number of shares they hold. This information is in principle not public, except in the case of listed companies which must disclose the shareholdings held by members of the board of directors and management, as well as the shareholdings of significant shareholders;
  • bearer: the bearer share can be exchanged without reference to the issuing company.

References (sources)

«S. A., S. L., S. C. P. | FundéuRAE», fundeu.es, 2005; Sociedad anónima, Wikipedia; «Paraguay promulga ley que elimina acciones al portador: once preguntas fundamentales para entender los cambios que trae la nueva Ley de Sociedades por Acciones.», Lexology; Code civil du Bas-Canada, 29 Vict., c. 41, (1865), art. 1864 <https://elois.caij.qc.ca/CCBC/article1864> consulté le 2020-08-11; La société anonyme (SA): bases légales.