Under Costa Rican law, there are three types of legal entities which offer limited liability to its shareholders. These are the Limited Partnership (Sociedad en Comandita), Limited Liability Company (Sociedad de Responsabilidad Limitada), and the most commonly used, the Corporation (Sociedad Anonima).

Limited Partnerships:

The Limited Partnership (Sociedad en Comandita) is made up of at least one general partner with unlimited liability for all the debts and obligations of the partnership and one or more limited partners whose liability is limited to the value of their capital contribution.

The limited partners are prohibited from actively participating in the administration of the partnership. If they actively participate their limited liability status is eliminated. The limited partner’s contributions to the partnership must be in the form of cash, property or commercial patents. Contributions in the form of services or credit are not allowed.

The Limited Liability Company:

The Limited Liability Company (Sociedad de Responsabilidad Limitada) was created as an alternative to the corporation. It is simpler to operate since it does not require many formal acts to function. Ease of operation makes it easily adaptable for use by small business enterprises.

The main characteristics of the limited liability company are that (i) the liability of the shareholders is limited to the amount of their capital contribution; (ii) the capital is divided into individual registered shares which cannot be sold to the public; thus, there is no public market for the shares; (iii) the company is made up of a minimum of two shareholders and there is no limit as to the maximum number of shareholders allowed. A company formed under these regulations is generally characterized by the ending S.R.L. or LTD.

The company is managed by one or several managers who may or may not be shareholders. While the simplicity of operation is a benefit of this form of incorporation the drawback is the limitation on the ability to transfer ownership of the Limited Liability Company to third parties.

The Corporation:

The Costa Rican Corporation (Sociedad Anonima) is the most widely used corporate form of business organization in Costa Rica. The main feature of the corporation is that the liability of the shareholders is limited to their capital contributions and stock ownership in the corporation is easily transferable to third parties.

To help educate and protect you with your real estate investments in Costa Rica, you can enjoy the following interviews with Attorney Roger Petersen and Attorney Rick Philps online at:

• Costa Rica Real Estate – Foreigners OK To Buy with FREE online video interview.
• Costa Rica Corporations – Why Pay More For Less? With FREE online video with Attorney Rick Philps
• Costa Rica Residency Categories Explained – With FREE online video interview with Attorney Rick Philps
• Costa Rica Property Taxes – When Scott officially complained that his property tax bill was too low… FREE online video interview with Attorney Roger Petersen.
• Buying or Building Real Estate in Costa Rica? Here is What You Need To Know? Part I with FREE online video interview with Attorney Roger Petersen.

Many of our VIP Members have found the three page ‘Costa Rica Closing Checklist’ to be very helpful in educating and protecting them with the various steps involved in buying real estate. Registered VIP Members can download the Closing Checklist here.

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Written and copyright by Attorney at Law – Roger A. Petersen. Roger has been an attorney since 1992 and is a member of both the Costa Rican and Florida Bar. He practices law in San José, Costa Rica and is the author of the best-selling book The Legal Guide To Costa Rica which you can order from Barnes & Noble here or from Amazon.com here. Attorney Petersen’s website can be found at Petersen & Philps Law Offices.




To speak with Attorney Roger Petersen about hiring him as your Costa Rica attorney, please contact him using the information below:

Andrew Makarik

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Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.