Dominican Corporation SA

By Felipe Isa Castillo (fcastillo@aclaw.com)

The Dominican corporation or Sociedad Anonima- SA is a business entity that exists among two or more persons under a corporate name and is composed exclusively by shareholders whose responsibility for the losses is limited to their contributions. Its capital is represented by negotiable titles called shares, who must be entirely subscribed and paid prior to their issuing.

The corporate name can be freely formed. It must be preceded or followed immediately and legibly by the words, “Sociedad Anónima” or by the initials S.A. Lacking one of these last indications, the partners will be jointly and severally liable before third parties.

The minimum amount of the authorized corporate capital is thirty million Dominican pesos (RD$30,000,000.00) and the minimum nominal value of the shares is one Dominican peso RD$1 each.

Corporations may be incorporated and operate as either privately owned or as public subscription entities. Public subscription entities are subject to applicable Dominican Republic securities laws and regulations and under the supervision of the Securities Superintendence.

The general shareholders meeting is the supreme organ of the company, it can accord and ratify all the acts and operations of the company. Its resolutions, in the matters of its competency, bind all the shareholders, including dissenting or absent shareholders when they have been approved in conformity with the law and the bylaws.

The meeting resolutions may be approved through a minutes signed by all the shareholders without the need to be present. Also their vote may be casted through any electronic or digital media as long as both circumstances are explicitly be indicated in the minutes that is drafted to such effect.

In the general shareholders meetings, decisions are approved by simple majority of shareholders representing more than half (1/2) of the corporate shares.

The Joint Stock Corporation is managed by a board of directors composed of at least three (3) members and the maximum number of members will be established in the by-laws.

Managers are designated by the incorporation meeting or the ordinary general +meeting. Their term is established in the By-laws for a period that does not exceed six (6) years when elected through the general meeting of shareholders and three (3) years when they are named under the By-laws. Managers may be reelected unless the By-laws provide otherwise and may be revoked at all times by the general meeting.

The president of the board of directors represents the corporation before third parties. The president is designated for a period that does not exceed the term of his position as manager. He may be reelected unless the By-laws provide otherwise. The general ordinary meeting may revoke the president at any time.

The board of directors is vested with the broadest powers to act in any circumstance in the name of the company, within the limits of the company purposes and under reserve of those powers explicitly granted by law to the shareholder meetings.

The board of directors will validly deliberate when at least half of its members are present, unless the by-laws provide for a greater proportion. The decisions are made by the majority of the members present or represented, unless the by-laws provide otherwise. The vote of the president of the session is decisive in case of tie, unless the by-laws provide otherwise.

In addition, the board of directors resolutions may be adopted in a minutes signed by all he members of the board of directors without need of a meeting.

The by-laws of the corporation will determine the rules related to the summoning and deliberations of the board of directors.

A minutes of each meeting needs to be drafted and must be signed by the president of the meeting and by the other managers present. If any does not want or cannot sign, such will be noted. The minutes are kept in the corporate domicile.

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