A limited liability company (S. de RL) is a type of business entity that combines elements of a corporation and a partnership. In an LLC, the partners have limited liability, which means that their liability is restricted to the payment of the amount of their investment in the company. This type of structure is very common in Honduras and is popular among small and medium-sized companies and family businesses, due to its legal protection, as it offers the advantage of limiting the liability of the partners for the debts of the company.
Requirements for the constitution of a Limited Liability Company.
To establish a Limited Liability Company in Honduras, the following are required:
- A minimum of 1 to a maximum of 25 partners. They can be natural or legal persons, Honduran or foreign.
- Contribute a minimum share capital of 5,000 lempiras.
- Prepare the corporate bylaws, which must specify:
- The company name or name, which must include the words “Limited Liability Company” or its abbreviation “S. from RL”
- The registered office.
- The corporate purpose or economic activity.
- The duration of the company.
- The share capital, number and value of contributions.
- The rights and obligations of the partners.
- The rules for the administration and representation of the company.
- Register the public deed of incorporation in the Commercial Registry.
- Obtain the permits and licenses required by the economic activity.
- Maintain organized accounting of social operations.
- File corporate tax returns.
Of the responsibility of the partners.
The partners of an LLC only respond or are obliged to pay their contributions, established in the Commercial Code Decree 73, in its article 66, that is, the partners are not personally liable (they are their assets) for the social debts. . The company’s creditors can only enforce debts against the corporate assets, not against the personal assets of the partners.
However, the partners may agree to guarantee certain corporate obligations with their personal assets, in which case they will be jointly and severally liable for them, but this guarantee must be expressly stated and is not presumed.
Any person outside the company who uses his or her name in the company name will be subsidiarily liable for the amount of the company’s operations up to the amount of the largest contribution (Article 68 Commercial Code).
Of Social Capital.
In accordance with Article 70 of the commercial code, the minimum share capital of an LLC is 5,000 lempiras, which is divided into social shares of 100 lempiras or multiples of 100. When establishing the company, the capital must be fully subscribed. At least 50% of the value of each share can be displayed, but in any case the sum of the contributions will not be less than 5,000 lempiras.
The share capital can be increased or decreased later. Any modification requires the agreement of the absolute majority of the partners and the modification of the social contract.
The contributions of the partners can be monetary, consist of goods, rights or work. They must be valued in the social contract. Each partner has a number of shares equivalent to the value of his contributions in relation to the share capital.
From the Administration of the Company.
In accordance with article 78 of the commercial code, the administration of this type of company will be in charge of one or more managers, these may be partners or people outside the company, appointed temporarily or for an indefinite period. Unless otherwise agreed, the company will have the right to revoke its directors at any time.
Why choose this type of company?
This corporate form is very attractive for Honduran and foreign entrepreneurs who wish to invest in the country, since it offers a simpler alternative than a public limited company, with lower incorporation and operating costs. Likewise, limiting liability to contributions reduces the partners’ risk, which encourages investment.
The S. de RL is a very versatile corporate form that adapts to businesses with diverse social purposes, from small businesses to complex service or industrial companies.
Conclusion.
In summary, the Limited Liability Company in Honduras is a corporate form with limited liability of the partners, a minimum capital of 5,000 lempiras, a maximum of 25 partners and a name that must include the words “Limited Liability Company” or “S . of RL”.
It offers an interesting alternative for the constitution of small and medium-sized companies that seek to limit the liability of the partners, with fewer procedures and costs than a public limited company. It is very versatile and adapts to businesses of various kinds, both for national and foreign entrepreneurs.
Carlos Padilla
