To make an SpA Modification in one day:
Steps to Modify a Corporation by Shares:
- Decide which part of the Bylaws to amend.
- Hold an Extraordinary Shareholders' Meeting or 100% Shareholders' Resolution.
- Reduce the Meeting or Minutes to Public Deed or notarize it before a Notary Public.
- If it is a One-Day Company, authorize before a Notary Public the Shareholders' Validity.
- If by registry system, authorize change extract.
- Then, upload and sign annotation in company in one day, or register and publish extract if it is a registry system.
- Give notice of modification to the Internal Revenue Service.
1. Why do a SpA Modification?
During the life of a joint-stock company, events normally occur that lead to changes in the company.
1.1 Increase in Capital and Change of Representatives
It is quite possible that when your business is growing you will want to make share transfers to include new to include new shareholders. Or increase the capital to issue new shares and include new investors. Perhaps you need to change your domicile to exercise functions in another location.
Changing the form of administration and the company's representatives is very common.
1.2 Modifying the Object or Activity
Changing the object of your SpA may also be necessary for tax purposes before the SII. tax purposes before the SII. You may even need to change the corporate type to a Corporation or Limited Liability Company; this is also a modification.
The shareholders of a stock corporation may make all the amendments they deem appropriate.
The objective is that the modifications are strategic, that they are carried out as quickly and as economically efficient as possible.
2. Problems with the Bank?
It is very common for new companies incorporated under the One Day Company system to have errors in their legal structure (formal and legal defects).
This means that even though the Company is operating, it has defects that make it null and void.
90% of the time, shareholders only notice this when submitting documentation to their banks to open bank accounts. It is here that the documentation is rejected for the reasons already stated.
The way to remedy this is either by amending the bylaws or by making the bylaws more stable (correcting the errors). This is done in the form of a bylaws amendment.
3. SpA Modification (One Day Company) - Step by Step Guide
The modification of an SpA into an Overnight Company can be done in two ways. The form will depend on whether the SpA is submitted to the traditional registry system or registered as a One Day Company.
How to modify a SpA (company in one day):
- An Extraordinary Shareholders Extraordinary Shareholders' Meeting and create an Extraordinary Meeting Act, where it is agreed (according to the voting quorums of the Bylaws) to modify the corporation. This document must be notarized in the form of a Public Deed or it must be protocolized. We recommend the notarization as it is more expeditious and cheaper than the Public Deed.
- Another alternative to the Extraordinary Shareholders' Meeting is that all the shareholders subscribe a public or private public or private instrument where the modification is recorded. Like the Meeting, this agreement of all the shareholders must be reduced to public deed or notarized.
- At the same time, at the notary's office, the following must be presented Certificate of Good Standing of Shareholders. This document shows who are the shareholders of the corporation at the time of the Shareholders' Meeting.
- In order to be successful in the previous point, we must present before a notary the Shareholders Registry that corroborates the information of the Certificate of Good Standing.
- These documents must be notarized if a new shareholder enters or leaves. This means that the notary includes the documents in his notarial registry.
- Once notarized, the notary must be asked to authorize an annotation on the www.tuempresaenundía.cl portal.
- After the Shareholders' signature, there is a period of 60 days to make the amendment in the following steps:
- With the notarized documents, we must enter to www.tuempresaenundía.cl o www.escritorioempresa.cl e enter the data of the Shareholders according to point 3 and also add the information of the company to be modified.
- The next step, in the same portal, we must attach the notarized documents in PDF format. This point is necessary so that the changes that we enter are precisely the same as those that were agreed upon at the Shareholders' Meeting or Agreement.
- Finally, we must sign the changes on the portal of www.tuempresaenundía.cl o www.escritorioempresa.cl. In practice this boils down to two options. If the shareholders have an advanced electronic signature (linkear) they can sign the changes personally in the holder. If they do not have an advanced electronic signature, the changes must be signed before a notary.
- For to sign the changes before a notaryTo sign the changes before the notary, the notary must be present with the attention number that the web portal will assign to the modification so that the notary can sign electronically.
- Once the new bylaws have been electronically signed, notice of the modification must be given to the SII. We will come back to this below.
4. Most Common Modifications
4.1 Change of Administration: it usually changes in one of the following situations:
- New shareholders have joined the corporation. It is then possible that one of them may require management powers to represent the company. For example, a shareholder X joins the company and will be actively in charge of the commercial area. This requires, in order to have greater ease in business practice, that he/she be granted the status of administrator or general manager.
- Shareholders of the company who had management powers have left the company. In this case, the loss of shareholder status may mean for the shareholders that the former shareholder no longer has any relationship with the corporation. Therefore, it is necessary to amend the bylaws and remove the former shareholder from its powers.
- The structure of the management body has changed. Many joint stock companies are born with few directors or a general manager. As the company grows and becomes more complex, a more complex management body may become necessary. Classic example? Moving from a general manager to a board of directors.
- Bank accounts: it is a requirement for banks to provide financial instruments that the company has more than one administrator. In this way, we can demand that our banks provide us with new cards, checkbooks, "digi-pass" and other instruments that are highly necessary for day-to-day business.
4.2 Change of Object: why change the corporate purpose or activity?
- The line of business declared in the bylaws may be subject to V.A.T. In order to request the change of line of business before the SII, it is advisable to modify it previously in the bylaws.
- The corporation may expand the range of activities or line of business that it has in its bylaws. If this happens in fact and the line of business has not been modified, then the acts or contracts made "on behalf of the corporation" will not be binding for the corporation. In order for the corporation to be the one contracting, it is necessary that it does so within its line of business.
4.3 Change of Address:
- The company may no longer be located at the address mentioned in the articles of incorporation.
- The tax address stated in the articles of association may not be suitable for carrying on business activities. This is frequent since new companies are incorporated in residential addresses. The consequences? The SII and the Municipality can fine your company.
- Agencies and new locations can be established throughout the nation or even abroad. To do so, we must first allow it in the bylaws.
- You want the value of the shares declared to the SII to be the real value of the shares. value of the company year after year. For the SII, the value of the company is simply the value of the statutes of the company.
- If the capital is not increased over time, and tomorrow you decide to sell your shares, the following will happen: the higher value that you are paid for it over the value of your initial contribution, is constitutive of income. This means that the shares are subject to the global complementary tax that will affect you as an individual shareholder. This is why it is convenient to update your contribution value to the company.
- Many times there are investors who wish to contribute funds to the company in exchange for a stake in the company. The most common way to do this is to issue new paying-in shares and have the investors subscribe to them in exchange for the funds.
Penalty for omission of registration requirements:
If any of the formalities required by law have been omitted, the amendment of the corporation will be null and void, i.e., it will have no effect. However, they may still produce effects among the shareholders and third parties as long as the nullity is not declared. Once declared null, the grantors of the null amendment will be liable to the third parties that contracted with the company.
The most common mistakes in the process of modifying a company are:
- Not having sufficient documentation to accredit the power of representation of the company and/or shareholders. Before the institutions.
- Forgetting to notify the SII of the modifications within the established term and incurring in fines.
- Failure to enter the articles amended by the Shareholders' Meeting in the system at www.tuempresaenundia.cl correctly.
- Failure to keep an updated shareholder registry.
The above formalities are very important, since otherwise the amendments will be considered absolutely null and void. However, they produce their effects among shareholders and before third parties as long as they are not declared null and void. Another important consequence is that once the amendment is declared null and void, the persons who granted the amendment become liable to third parties who contracted with the company.
5. What are the modifications that must be reported to the SII?
New: With the Tax Modernization reform, the following modifications must be reported within 2 months to the SII in the manner established in Article 68 final clause of the Tax Code, which establishes that:
Taxpayers must communicate to the Service, through the electronic tax folder, any modification to the information contained in the form for the commencement of activities within a period of two months from the date of the respective modification or, if applicable, from the date of the respective registration in the corresponding Commercial Registry, attaching to the electronic tax folder the background information on the modification. The electronic tax folder will contain a form with the fields required for updating the records.
Pursuant to the foregoing, the taxpayer shall comply with all the obligations to update the corresponding information, without the need for other procedures, and the Service shall update all the corresponding records and incorporate the background information into the aforementioned folder. In the same manner as indicated Law 21210 Art. 1 N° 31 b) D.O. 24.02.2020inthe preceding paragraph, for the same purposes and within the same term, taxpayers must notify the Service of the modifications of legal or conventional representatives with general powers of administration; modifications of capital, profit sharing agreements other than the participation in the capital stock and series of shares that grant rights for the preferential payment of dividends; modification of partners, shareholders or co-owners; mergers, including that produced by the reunion of the total participation of a company; divisions; and, transformations or conversion of an individual entrepreneur into a company.Art 68, final clause Tax Code
- Modification of the Corporate Name.
- Change of address.
- Modification of the declared activity or line of business.
- Opening, change or closing of branch office.
- Modification of the postal address (P.O. Box or post office box).
- Entry, withdrawal or change of partners or co-owners (transfer of rights); modification of the percentage of participation in the capital and/or profits.
- Capital contribution of legal entities.
- Change of representatives and their addresses.
- Corporate transformations.
- Conversion from sole proprietorship to partnership.
- Contribution of all assets and liabilities to another company.
- Merger of companies.
- Absorption of companies.
- Division of companies.
5.1 SII Change Forms
If you do not know which is the corresponding Unit, check here.
5.2 What is the deadline for reporting to the SII?
The deadline for communicating these changes to the SII is within 2 months from the date of the modification of the data or background, or from the date of registration in the Commercial Registry, in the relevant cases.
The latter with the exception of the modification of the profit sharing percentage .
In this case, the deadline is January 31 of the year immediately following the year in which the modification was made and the Notice must be formalized in the form of filing at the Service Unit corresponding to the jurisdiction of the taxpayer's domicile.
The modifications of companies through the Company-in-a-Day system present particularities that must be taken into account. Given the different procedures, both notarial and in the web portals to which this process is subject, it is necessary to seek advice.
Low costs and the speed with which modifications can be obtained make this system an increasingly viable option.
The convenience of having the bylaws updated on the portal at www.escritorioempresa.cl and being able to access them in a single, updated and free document, makes this system attractive to modern SMEs.
At New Society Solutionswe believe that this system represents the future of our corporate law.
The truth is that the possibilities of modification are at the disposal of the drafting lawyers, being infinite.
The real challenge is to know how to translate this will into bylaws that are orderly and harmoniously drafted in the ever-controversial system of drafting company "forms" in one day.