CHILE Law and Practice Contributed by: Patrick Humphreys, Daniela Gazmuri Larraín, Paula Lühr, Ian Hinzpeter, Camila Leviante, Beatriz Riveros and José Luis Bravo, Garnham Abogados
2.4 Right to Appeal Since Chile does not have a general foreign invest - ment screening system, there is usually no investment approval decision to appeal. Disputes are more likely to arise in relation to a specific administrative act, such as the denial of a sectoral permit, a refusal to grant a benefit, a sanction imposed by a regulator, or a disagreement over the InvestChile certificate. If InvestChile does not issue the certificate within the statutory 15-day period after receiving a complete application, the general rules of Chilean administrative procedure apply. Depending on the circumstances, judicial review may also be available where the deci - sion is unlawful, arbitrary or affects protected rights. Sectoral regimes may contain their own appeal pro - cedures and deadlines. Foreign investors should not assume that appeal rights are uniform across sectors. The correct route depends on the authority involved, the type of decision, the wording of the applicable statute and whether the decision has already been formally notified. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Sociedad por Acciones(SpA) The sociedad por acciones (SpA) is the most flex - ible and commonly used vehicle for foreign investors entering Chile. It may be formed by one or more share - holders, whether individuals or legal entities, Chilean or foreign. Shareholder liability is generally limited to the amount of their capital contributions, and Chil - ean law does not impose a general minimum capital requirement. It is principally governed by Articles 424 et seq. of the Commercial Code and its by-laws, and, on a sup - plementary basis, the provisions applicable to Socie- dades Anónimas Cerradas (closely held corporations). SpAs are especially suitable for start-ups, private equity investments, holding companies and wholly owned subsidiaries. Its by-laws may provide a simple management structure, such as one or more manag - ers, or a more formal structure, such as a board of
directors. Shares are generally transferable, although the by-laws may include restrictions, rights of first refusal or other shareholder protections. Sociedad de Responsabilidad Limitada (Limitada) The sociedad de responsabilidad limitada ( limitada ) is a traditional private company governed mainly by Law No 3,918 and, on a supplementary basis, by the Commercial Code and Civil Code. It is a partnership- style company, commonly used for closely held busi - nesses, professional services, family-owned compa - nies and joint ventures where the participants want control over the admission of new partners. A limitada requires at least two partners and, in gen - eral, no more than 50. Partners may be individuals or legal entities, Chilean or foreign. Their liability is usually limited to the amount of their agreed contri - butions, unless the by-laws provide for a higher level of responsibility. The company name must include the word limitada . If it is omitted, the partners may become jointly and severally liable for the company’s obligations. There is no general minimum capital requirement for a limitada . Contributions may be made in cash, assets or, in some cases, work or services contributed by the partners. The by-laws may also define the company’s business purpose, management powers and internal control mechanisms with considerable flexibility. In practice, a limitada is less flexible than SpAs when ownership changes are expected. Amendments to the by-laws and transfers of partnership interests usually require the consent of all partners. This makes the structure less efficient for venture capital or fast-grow - ing businesses, but useful where the partners want a stable and closed ownership structure. Sociedad Anónima (SA) The sociedad anónima (SA) is a capital company governed mainly by Law No 18,046 and, on a sup - plementary basis, by the Commercial Code and Civil Code. It has its own legal personality, separate from its shareholders, and is commonly used for larger com - panies, regulated businesses and entities that may seek institutional financing or access to capital mar -
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