With the entering into force of Law 20.659 that creates the Electronic Company Registry, now two different systems coexist by both of which a company could be constituted.

The former is the Registry System which requires for a company’s creation, an agreement reduced to a public deed, of which an extract of it has to be registered in the respective Real Estate Registry (Conservador de Bienes Raíces) and published in the Official Journal. We will call this system the “old system”.

The latter is the system known as 1 Day Company (Empresa en 1 Día), by means of which a company or partnership may be created directly before the electronic registry, and it does not require any further procedures for the company to have legal existence.

By both systems coexisting, the law offers the possibility to migrate the company or partnership from one system to the other.

The new system greatest benefit is that it allows in an easier manner to constitute, modify, transform, divide, merge and dissolve companies, considerably and significantly reducing time and costs in comparison to the traditional system. At the same time this results into the strengthening of the entrepreneurship, a vital issue for the economic development.

Migrate from the Old System to the 1 Day Company System.

For this to be done it is required a “Simplified Regime Migration Certificate” which is issued by the Real Estate Registry of where the registry of the company or partnership was done.

To request this certificate, an agreement where all the partners of the company consent in the change of system or migration has to be submitted (or the majority of them in the case of SpA). This agreement has to be authorized by a public deed and submitted before the Commerce Registry (Registro de Comercio) within 60 days’ time.

Depending of the type of company involved, formalities will vary and so will the text for the drafting of the agreement.

Once the migration to simplified regime certificate is obtained, an online form with the company’s information that is migrating to the new system must be filled within 30 days, as well as the information that appears in the migration certificate and also the partners information.

Then the certificate has to be attached to other documents that the system requires, and afterwards sign through Advanced Electronic Signature or before a Notary Public, doing so would mean the end of the process.

In more concrete terms, a society’s constitution by this new registry consists in a simpler and quicker procedure, with the help of an efficient technical support, the constitutor acquires the bylaws that he needs and thus, it is incorporated publicly and permanently to the registry. It also extends to the publishing. Then, a provisional company tax ID (Rol Único Tributario) will be issued , which allows to initiate commercial activities through a link that this procedure has with the sii.

It has to be noted, that the old system is still available for creating companies in the traditional way.

Migration from 1 Day Company System to the Old System

The Law and its Regulation take this case into account and both of these indicate how theoretically the migration should be done: By filling a migration form to the general regime, in any time, and the titleholders of the social rights should subscribe it while the system notices the Internal Revenue Service and issues the corresponding migration certificate.

Nevertheless the companies’ electronic registry, by the time being, does not contemplate this option, hence it is not possible to perform this kind of migration.

There is also the case of those companies that cease to be benefitted by this law, for instance, Simplified Corporations (Sociedad por Acciones) that are converted into a Corporation. In this case the lapse to migrate is 30 days, counted since the companies that are able to apply the simplified regime cease to use it.

Finally, it is worth mentioning that a company will not be able to register commercial or legal acts in both regimes, because the norm contemplates that a company constituted in one system, cannot register these acts in the other.

Santiago Henríquez and Angélica Solar, Lawyers

Photo: John Cobb (CC0)