Bolivia recognizes many business forms including a stock company or corporation (sociedad anonima S.A.), a partially state-owned corporation (sociedad anonima mixta S.A.M.), a limited liability company (sociedad de responsabilidad limitada S.R.L.), a general partnership (sociedad colectiva S.C.), a limited partnership (sociedad en comandita simple), a joint stock company (sociedad en comandita por acciones), a temporary association (asociacion accidental), and an individually owned company (empresa unipersonal). Each has its own advantages and disadvantages. For any particular venture, personal and business circumstances will dictate the business form of choice.
Types of Companies:
Stock Company or Corporation (Sociedad Anonima S.A.): A company where common capital consists of transferable shares and where each stockholder’s liability is limited to the number of shares held. The corporation’s board of directors manages the company, and it is comprised of 3-12 individuals (who may be shareholders) who are elected by stockholders. Business may be conducted by one or more shareholders or by third parties appointed for this purpose.
Partially State-Owned Corporation (Sociedad Anonima Mixta S.A.M.): Similar to a stock company or corporation, but with the Bolivian government participating as a shareowner.
Limited Liability Company (Sociedad de Responsabilidad Limitada S.R.L.): A company where each partner’s liability is limited to the amount invested. The firm may have between 2-25 partners. Capital shares must be paid in full at the time of incorporation.
General Partnership (Sociedad Colectiva S.C.): A company in which partners have both joint and individual liability.
Limited Partnership (Sociedad en Comandita Simple): A company consisting of one or more general partners, jointly responsible as ordinary partners, and one or more limited partners who are not liable for the partnership’s debts beyond the sum contributed as capital to common stock.
Joint Stock Company (Sociedad en Comandita por Acciones): A company whose partners are liable for obligations as ordinary partners, while limited partners incur no liability beyond the number of shares held.
Temporary Association (Asociacion Accidental): A short-term agreement for commercial purposes without formal partnership where two or more persons unite for more transitory or specific operations.
Individually Owned Company (Empresa Unipersonal): A company whose only owner is a person. If a foreign firm would like to establish a wholly owned subsidiary in Bolivia, there is a separate registration process from registering a local company. Foreign firms wishing to establish a subsidiary should allow one to two months to complete the basic processes. Fundempresa is a mixed public/private organization authorized by the central government to register and certify new businesses.
Non-profit organizations must register with the local government offices of their respective departments to receive authorization. While non-profit organizations can register with local government offices, many foreign NGOs in particular are viewed with suspicion. Top NGOs, such as USAID, have been charged with “conspiracy against the state” and evicted from Bolivia. Under Evo Morales’ presidency, foreign NGOs that do not cooperate with the state have been threatened with eviction.