DOMINICAN REPUBLIC Law and Practice Contributed by: Sarah de León Perelló, Elizabeth Silfa Micheli and Naomi Rodríguez Manzueta, Headrick Rizik Álvarez & Fernández
Criminal Liability of Legal Entities Under Law No 74-25, establishing the Dominican Criminal Code, which was enacted on 3 August 2025 and is set to take effect in early August 2026, legal entities may now face criminal liability. Specifically, a legal entity may be held criminally responsible for offences arising from wrongful acts or omissions com - mitted by its officers, representatives, or employees acting on its behalf, where such conduct is attribut - able to the entity’s failure to exercise adequate over - sight, direction, or supervision. Relieving Directors From Liability: Statute of Limitations The statute of limitations for the civil claims in dam - ages provided in the law is two years from the date of The general principle is that companies have separate legal personality, independent from that of their share - holders. However, in limited cases, the legal personal - ity of the company may be pierced, thus making its shareholders and/or its directors and/or officers liable. According to Law No 479-08, the corporate veil can be pierced when there is reason to believe that the company is used to commit fraud against the law, vio - late public order or to commit fraud to the detriment of the rights of shareholders or third parties. the default or breach of duty. Piercing the Corporate Veil The Tax Code abides by the “substance over form” concept, and thus, under said principle the corporate veil may be pierced. Additionally, Section 11 of the Tax Code, as amended by recently enacted Law No 25-24 amending Sec - tion 11 of the Dominican Tax Code (“Law No 25-24”), establishes joint and several tax liability for directors and shareholders of a company in connection with the company’s tax obligations. Law No 25-24 provides that presidents, vice-presidents, directors and man - agers of a company and representatives of entities without legal personality will be jointly and severally liable if they have evaded or neglected their respon - sibilities or permitted tax non-compliance, whether intentionally or negligently. Shareholders of a legal entity, as well as the ultimate beneficial owners, will
• S.A.s are managed mandatorily by a board of directors composed of at least three members, and supervised by one or more statutory auditors ( comisario de cuentas ). • S.A.S.s’ rules of management and structure are governed by their by-laws. They may be managed by a sole director (president), a board of directors or any other management body or structure. A statutory auditor is optional, unless the company issues the securities allowed by the law for this legal form, in which case it is mandatory. • S.R.L.s can have one sole manager, two manag - ers or a board of managers. Managers can only be individuals. A statutory auditor is optional and is not customary. 3.5 Directors’, Officers’ and Shareholders’ Liability Liability of Directors Directors shall be liable, towards the company or toward third parties, for any infringement of the law, breach of the company’s by-laws, defaults in their management, including negligence, or any torts and damages against shareholders or third parties result - ing from their acts or omissions vis-à-vis shareholders or third parties. Directors are under a general duty of loyalty, duty of acting as a good businessperson (duty of care), duty of non-compete and duty of confidentiality. Directors’ related transactions (and shareholders transactions in S.A.S.s and S.R.L.s) are regulated by the law and certain director-related transactions (and shareholders transactions in case of S.R.L.s) are prohibited. Available civil claims in damages for directors’ liability include both individual claims by the aggrieved party (shareholder or third parties) in accordance with gen - eral civil liability rules of law, as well as a company’s claim in damages for directors’ liability that, individu - ally or collectively, shareholders may seek. In addition to civil liability, the law also provides for directors’ criminal liability. Provisions on liability vary depending on the company type in question.
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