Simplified Joint Stock Companies (SAS)
On December 6th, 2023, the Legislative Assembly of El Salvador approved amendments to the Commercial Code with the aim of promoting business and boosting economic activity. Among the significant changes, the incorporation of a new type of company stands out, known as “Sociedad por Acciones Simplificada” or its abbreviation “S.A.S.”
S.A.S. have the particularity that they can be formed by a single person, either a natural person or a capital company, unlike Variable Capital Anonymous Companies, which require the participation of two or more partners.
According to the amendments to the Commercial Code, S.A.S. will be established, transformed, dissolved, liquidated, and undergo other corporate acts through forms provided by the Commerce Registry of the National Registry Center of El Salvador. Therefore, the requirement for a public deed or any additional formality for the company’s establishment will not be necessary, streamlining and facilitating the process.
The social capital of S.A.S. will be composed of contributions from the shareholder or shareholders and will be divided into shares, which can be represented by physical or electronic certificates. The minimum social capital to establish an S.A.S. will be one United States Dollar, which must be fully subscribed at the time of incorporation. Regarding the payment of the capital, it can be made, as agreed upon by the shareholders, after the registration of the company. However, the deadline for the payment of shares will not exceed two years, and it can be made through in-kind contributions, industry, cash, bank transfer, or electronic wallet transfer.
This reform will allow Salvadorans residing abroad to establish companies within the national territory through the use of certified electronic signatures. The single shareholder may decide whether the social books for the company’s operation can be kept in physical or electronic format, with at least one book being mandatory for the minutes of administrative bodies and accounting books. Similarly, current companies may choose to transform or merge into a Simplified Action Company at any time to access the advantages offered by S.A.S.
Another particularity of S.A.S. is that the appointment of an internal or external auditor or a supervisory board will not be mandatory for those S.A.S. considered as microentrepreneurs according to current legislation.
Regarding the legal representation of S.A.S., it is important to note that it will be the responsibility of a natural person designated in the constitutive form, who may be the sole shareholder, if applicable. The legal representative is not required to remain at the company’s registered address.
In conclusion, the establishment of S.A.S. will facilitate the formalization and registration of single-person companies, with the expectation that this will enable micro, small, and medium-sized entrepreneurs to formalize their businesses.