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Articles of incorporation |
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By law, the entity must have the following corporate characteristics:
- Company name: This may be in English provided it is accompanied of the corresponding Spanish translation and consist of a word or a number of words with or without a meaning as long as it is not deemed generic and provided it has not been previously registered. In any event, the company name must be followed by the words “Sociedad Anónima” or “S.A.” (equivalent to “Incorporated” or “Inc.”) with the purpose of identifying the nature of the business entity.
- Legal Domicile: Since incorporation takes place according to local laws, the company or corporation is legally Costa Rican Agencies and Branches may be created to carry out activities in or out of the country. Corporations are allowed to carry out businesses all over the world.
- Legal Term: Indefinite terms are not allowed by law. Therefore a fixed term must be determined at will. This term may be shortened or extended also at will and convenience and generally ranges between 50 to 100 years.
- Corporate Purpose: As opposed to other jurisdictions where comprehensive, meticulous and lengthy descriptions of the corporate purpose are required, the business purpose and local activities are broadly implied in the law. Thus, simple and general provisions thereto are sufficient, although detailed descriptions are also allowed.
- Share Capital: This consists of the amount of money for which the company will be capitalized. The Share Capital (necessarily a fixed amount) is divided into common par value shares each entitled to one vote. These shares must be registered (nomina-tive) since local regulations do not allow bearer or non-par value shares. However, shares may be endorsed openly and therefore perform, for all practical purposes, as bearer shares. There is no minimum Share Capital requirement. Shares are freely transferable unless provided otherwise in the Articles of Incorporation (¡.e. Right of First Refusal and other lawful restrictions). Shares may be issued as single units or as stock certificates thereof.
- Board of Directors: Every corporation must have a Board of Directors comprised of a minimum of three individuals to hold the positions of President, Secretary and Treasurer, which must be eighteen or older. Additional Board members may be appointed at will. It is not required that Board members be simultaneously shareholders.
- Officer authority: As the (statutory) legal representative of the corporation it is mandatory for the President to hold full powers of attorney. However, if deemed suitable other Director or Directors, as well as managers and outside individuals may hold powers of attorney of any kind to act individually or jointly on behalf of the company. These powers of attorney may be limited or restricted (including those held by the President) by several means to meet the company's internal controls.
- Statutory Examiner: Corporations may appoint one or more Statutory Examiners (individuals and/or companies, mainly auditing firms). The main responsibilities of this officer are to watch over and ensure that all corporate rules, statutory obligations and procedures are duly and adequately mea as a protection of the interests of shareholders and other related parties.
- Registered Agent: Corporations which legal representative is not domiciled in Costa Rica must appoint a Registered Agent, whose sow (passive) legal duty is to be served with administrative and court actions on behalf of the corporation. Appointment thereto must fall upon a local practicing lawyer with registered business offices within the country.
- Legal Reserve: Corporations in Costa Rica are required to assign annually 5% of net earnings to forms legal reserve up to 20% of its Share Capital. Such reserve need not be funded.
- Legal Books and Records Corporations must open Legal Books (journal, general ledger, financial statements, shareholders' registry and minute books for shareholders' and board meetings); such books must be bound and stamped by local Tax Authorities.
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Business and Economy 
