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
3.3 Ongoing Reporting and Disclosure Obligations Private-Company Filings Private Chilean companies are not subject to the same ongoing public disclosure regime as listed companies. However, key corporate changes must be formally documented and registered or published when required. This includes amendments to by-laws, changes to capital, transformations, mergers, divi - sions and dissolution. Tax, Accounting and Ownership Information Private companies must keep accounting records, file tax returns and comply with electronic invoicing and tax reporting obligations. They are also expected to keep updated corporate books or electronic records showing shareholders, partners, capital and corpo - rate decisions. Financial statements of purely private companies are generally not filed publicly, but they are relevant for tax, banking, financing and shareholder purposes. Chile has increased the practical importance of own - ership transparency, particularly for tax, banking, anti- money laundering and compliance checks. Compa - nies may be asked to identify their controllers, ultimate beneficial owners and politically exposed persons when dealing with banks, notaries, public authorities, regulated counterparties or public procurement pro - cesses. 3.4 Management Structures Flexible Management in SpAs and Limitadas The SpA offers the most flexible management struc - ture. It may be managed by one or more managers, a board of directors or another structure set out in the by-laws. This flexibility is one reason why foreign investors often choose SpAs for subsidiaries, holding companies and joint ventures. A limitada is usually managed by one or more partners or by appointed managers. The articles of associa - tion should clearly state who may bind the compa - ny, whether they may act individually or jointly, and whether their powers are limited.
kets. An SA requires at least two shareholders, who may be individuals or legal entities, Chilean or foreign. The capital of an SA is divided into shares, and share - holder liability is generally limited to the amount sub - scribed or paid for those shares. There is no general minimum capital requirement. Contributions may be made in cash or assets, but shares may not be issued in exchange for personal work or services. An SA is managed by a board of directors. Closed corporations must have at least three directors, while open corporations must have at least five. Directors must be natural persons, may be Chilean or foreign, and are removable by the shareholders. There are three main types of SA • open corporations, whose shares are traded or registered with the Financial Market Commission; • special corporations, which are subject to specific statutory regimes; and • closed corporations, whose shares are not traded on a stock exchange. For foreign investors, an SA is usually appropriate where a more formal governance framework, external financing, institutional shareholders or a future listing is expected. 3.2 Incorporation Process Companies in Chile may be incorporated through the traditional notarial and registry route. This involves preparing a public deed or notarised instrument and, within 60 days after the signing, registering an extract with the relevant Commercial Registry and publishing the extract in the Official Gazette ( Diario Oficial ). The same route is used for many amendments, including changes to by-laws or corporate form. In practice, the traditional process often takes one to three weeks, depending on the complexity of the by- laws, the availability of signatories and the timing of tax and bank procedures. Foreign shareholders usu - ally need Chilean tax identification numbers and pow - ers of attorney if they will not sign in Chile. Documents executed abroad normally need apostille or legalisa - tion and, where applicable, Spanish translation.
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