Reminder of January 2019 Obligations

We remind that the following obligations must be satisfied in February 2019

Submission of list of foreign corporations to the Superintendency of Companies, Securities and Insurance:

Domestic companies with foreign corporations among their partners or shareholders are obligated to submit the following information to the Superintendency of Companies by February 5:

1. A certificate of legal existence of the foreign corporation. This certificate must be issued by the competent authority in the country of origin and authenticated by an Ecuadorian consul or apostilled.
2. A complete list of all the shareholders up to the final beneficiary who is an individual or a corporation listed in a stock exchange.It must specify names and surnames and marital status in the case of individuals, and corporate name in the case of corporations and, in both cases, nationality and residence.  This information must be signed and certified by a notary public.

If the foreign corporation is listed in one or more foreign stock exchanges, it must submit an affidavit in respect of such listing and that its entire capital stock is exclusively represented by shares, share quotas or securities.

• If those documents are not submitted before the first regular shareholders meeting, the foreign corporation cannot attend, participate or vote in that meeting.
• In the event of default during two or more years, the foreign corporation may be excluded from the company upon a prior agreement from the shareholders meeting.
• The company’s legal representative is obligated to inform the Superintendency of Companies about compliance with that obligation.
• If the information about the shareholding structure has not changed, it will suffice if the company submits a sworn statement in that respect.
• If the information reported has changed, the aforementioned documentation must be issued with the date of submission.

Submission of Annex of Shareholders, Equity-holders, Partners, Members of the Board of Directors and Managers

Companies, branch offices of foreign companies that are residents in Ecuador and permanent establishments of non-resident foreign companies are obligated to submit the Annex of Shareholders.

The Annex of Shareholders,Equity-holders, Partners, Members of the Board of Directors and Managers must be submitted through the web page of the Servicio de Rentas Internas (SRI for its initials in Spanish), in general, during the month of February of the fiscal period following the one to which the information relates.

Without prejudice to the relevant sanctions provided in the current tax legal framework, failure to submit or incomplete submission has consequences in regards to the applicable tax rate for the taxpayer.

In the event of any changes to the list of partners or shareholders, the Annex must be submitted by the 28^thday of the month following the month in which the incorporation or change took place.

Submission of Personal Expense Annex

Natural persons whose deductible personal expenses exceed 50% of the basic non-taxable allowance of the current income tax for the declared fiscal period are obligated to submit the information regarding their personal expenses corresponding to the immediately preceding year.

The personal expense annex shall be submitted in the month of February pursuant to the following calendar:

If required, the taxpayer has an obligation to submit the sales receipts reported in the personal expense annex.

Warning: This newsletter by Pérez Bustamante & Ponce is not and cannot be used as legal advice or opinion since it is merely of an informative nature.