On December 13, 2019, the Amendment to the Companies Law was published in Official Register Supplement No. 100. This includes the following principal changes:
Multiple spin-offs are permitted
- The amendment defines spin-offs as those that involve two or more companies that separate from given business units in order to contribute them to a new company.
- Partners or shareholders of the new company may be the same companies that make the contribution, or the partners or shareholders of the latter.
Cross-border mergers are authorized
- Cross-border mergers are processes whereby one or more foreign companies merge with one or more Ecuadorian companies, to form establishments and operate through the Ecuadorian company.
- The absorbed companies must cancel their registration in the country of origin. The Superintendency of Companies, Securities and Insurance will perform the consolidated and cross-border supervision of this obligation.
- In these processes, the companies are obliged to prepare a balance sheet as at the day before the date on which the notarial instrument for the merger is executed. The balance sheet does not need to be inserted in the notarial instrument, but the company must make it available to the partners, shareholders and interested third parties at its registered office.
Activities of companies that have been dissolved by the Superintendency
- Companies that have been dissolved for any reason are legally prevented from performing new operations relating to their corporate purpose, save with reference to their liquidation process. But they do maintain all their tax obligations as per the Internal Taxation Law.
- If a dissolved company receives profits from any source, it must declare this and pay the corresponding tax.
Corporate contributions in the event of dissolution
- No corporate contributions will be generated in favor of the Superintendency of Companies, Securities and Insurance by companies in a state of dissolution as of the date the dissolution resolution is issued, or the resolution that orders liquidation is issued.
- In this case, the contribution will be calculated in a proportional manner up to the date these resolutions are issued, in accordance with the tangible assets reflected in the balance sheet or statement of financial position for the respective fiscal year.
- If the dissolved company is reactivated, the contribution will be generated during the time in which it was in a state of dissolution and liquidation. Companies that overcome their state of dissolution are obliged to pay the contributions. To this end, before the resolution for reactivation is issued, the Superintendency of Companies will calculate the contributions, interest and fines that are owed.
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