The function of a corporate secretary is pivotal within any corporation. These professionals exhibit a diverse skill set and undertake various responsibilities, with their primary focus being to guarantee the organization’s adherence to annual compliance regulations in Ecuador and the statutory requirements of the relevant country or jurisdiction. They are present at all top-level meetings and are tasked with executing all the decisions, resolutions, and changes put forth by the corporation’s Board of Directors. What’s more, they are integral in matters of entity annual compliance in Ecuador. SEE ALSO: An SAS Corporation in Ecuador: Benefits & Considerations
We recognize the challenges inherent in adapting to the new legislation, especially when it comes to complying with corporate obligations. In order to simplify this process, Biz Latin Hub has designed the following Annual Fiscal Compliance calendar. Corporate secretaries are trained professionals and knowledgeable of the rules and regulations that must be followed in a given jurisdiction such as Ecuador. It falls on them to observe the running of the business to safeguard against infractions of the rules and regulations. If irregular or illicit activity is found to be taking place within the organization, the result could be fines in the tens of thousands or even millions of dollars. One way corporate secretaries can fend against such regulatory infractions is by conducting an entity’s annual compliance review. Ecuador has always had stringent compliance rules for companies operating in its territory. Each industry (oil and gas, mining, banking, corporate finance, etc.) will have its own set of rules, regulations, and statutory requirements to which companies must comply. Entity annual compliance in Ecuador: What compliance regulations must companies follow?
Financial Compliance Requirements
Presentation of annual financial statements. The presentation of the financial statements is important for shareholders, so they understand the economic activity the company is engaged in. Details about how much the company made in overall profit, gross vs. net revenues, operating expenses, and the like need also be communicated to shareholders at annual shareholders meetings. Annual Financial reports must also be sent to the Ecuadorian tax authority every year.
Corporate Compliance Requirements
Entity annual compliance in Ecuador requires that the following issues be discussed and resolved in a corporation’s annual shareholder meeting:
- Annual Shareholders Meeting: A shareholders’ meeting must be convened at least once annually within the initial three months of the year. The purpose of this meeting is to approve accounts, financial statements, and the administration of the legal representative.
- Annual strategy report: Company management has the obligation to present to the shareholders an annual report of their activities, and how they relate to the financial statements of the company.
- Update and maintain corporate books: Part of the compliance for the entity is to have the corporate books up to date
- Profit and loss report: Shareholders must be made aware of the company’s financial performance for the past year.
In order to simplify processes, Biz Latin Hub has designed the following Annual Legal calendar as a concise representation of the fundamental responsibilities that every company must attend to in Ecuador Entity annual compliance in Ecuador: Disclosing foreign shareholders or UBO report
Compliance regulations stipulate that the number of foreign shareholders be reported, as well as how much of the company’s stock they own. Each year, before January 31st a company must provide the names, nationalities, and contact information of foreign shareholders to the appropriate government authorities. In case a shareholder is a foreign company and not an individual, the name, nationality, and contact information of the representative of the institutional shareholder must be reported. Reports to regulatory bodies must be carried out for entity’s annual compliance Compliance rules and regulations also stipulate that a company needs to carry out the following actions:
- Make available a report detailing the discussions and decisions ratified at the annual shareholder meeting
- Send all relevant compliance documents to the Superintendence
Company structure Depending on the type of structure of the company (be it public, limited liability, SAS, etc.) there are additional requirements that must be met. This is where the corporate secretary again becomes essential, as it will be her/his duty to inform company management about the additional items/actions that will be needed to ensure corporate compliance. Common Questions for Entity Legal Compliance in Ecuador
Common Questions for Entity Legal Compliance in Ecuador
Based on our extensive experience these are the common questions and doubts of our clients when looking to operate within the country
- What are the common statutory appointments for a company in Ecuador?
- Is a Registered Office Address needed for a legal entity in Ecuador?
Biz Latin Hub can help you with entity annual compliance in Ecuador Entity Annual Compliance Ecuador – Key services offered by Biz Latin Hub
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets. Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross-border operations. As well as knowledge about entity annual compliance in Ecuador, our portfolio of services includes hiring & PEO, accounting & taxation, company formation, bank account opening, and corporate legal services. Contact us today to find out more about how we can assist you in finding top talent, or otherwise do business in Latin America and the Caribbean. If this article on entity annual compliance in Ecuador was of interest to you, check out the rest of our coverage of the region. Or read about our team and expert authors. The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
