New law would remove personal protections afforded by S.A.’s
SAN JOSE, COSTA RICA – October 19th, 2012 – A new law is in process in the Legislative Assembly, which lawmakers say is aimed at cracking down on fraud. Lawmakers say they want to remove the “veil” that currently exists around Costa Rican corporations, known as sociedad anonimas, or S.A.’s, in order to defend the rights of third parties.
The proposal was submitted by the legislator Jose Maria Villalta, and is currently in the hearing phase before the Legal Matters Commission in Congress.
“If, during a trial, abusive or fraudulent activity is found to exist in a legal association in order to mock the law, what will happen is that the principle of separation and limitation of responsibility between the association and its partners will be broken,” said Villalta.
The law would extend liability from the S.A. to its owners for fraud or legal non-compliance.
The proposed law would also prevent owners of corporations from avoiding debts, liabilities to third parties, or obligations to social security, labor or family matters.
The motion for the new law has already been met with positive reviews from the General Controller’s office.
“We consider it to be an appropriate, reasonable, proportioned and convenient legislative measure for public interest,” said the written response from the Controller’s office.
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