TYPES OF COMMERCIAL COMPANIES IN BOLIVIA

SIMPLE LIMITED PARTNERSHIP IN BOLIVIA

This structure includes limited partners, whose liability is limited to their contributions, and general partners, who have unlimited liability. Only the contributions of limited partners form the company’s capital. The business name must reflect this structure, and improper use of names may lead to unexpected liabilities.

Only general partners may manage the company. Limited partners cannot participate in management without assuming unlimited liability. However, they may audit the financial statements and accounting records. In urgent cases, a limited partner may act temporarily, provided the situation is regularized within ninety days to avoid personal liability.

LIMITED LIABILITY COMPANY IN BOLIVIA

In a Limited Liability Company (Sociedad de Responsabilidad Limitada), partner liability is limited to their contributions. Capital is divided into quotas rather than shares. The number of partners must not exceed twenty-five, and the company name must include “Limitada” or “S.R.L.” This form is common among family businesses and small enterprises.

Quotas can be freely transferred among partners, but transfers to third parties may be restricted. A partner registry book is required. Key decisions are made in an annual Assembly. A legal reserve of five percent of profits must be created until it reaches fifty percent of the paid-in capital.

CORPORATION IN BOLIVIA

A Corporation (Sociedad Anónima) allows for greater investment flexibility as its capital is divided into shares. Shareholders are liable only up to the amount of their shareholdings. The business name must reflect the company’s main purpose, followed by “S.A.”

It may be incorporated by a single act or through public subscription. Governance includes a General Shareholders’ Meeting, a Board of Directors, and one or more Auditors. It is subject to oversight by a specialized authority, which authorizes its operation and may convene shareholders’ meetings.

Capital increases are allowed through new share issuances, respecting existing shareholders’ preemptive rights. This structure is ideal for large companies seeking diversified funding sources.

PARTNERSHIP LIMITED BY SHARES IN BOLIVIA

This hybrid model combines features of a corporation and a limited partnership. General partners have unlimited liability, while limited partners participate through shares and are only liable up to their contributions.

The company name must include “S.C.A.” If omitted, it is legally treated as a general partnership. Management is handled by the general partners, while both partner types vote at shareholder meetings based on their contributions.

ACCIDENTAL ASSOCIATION IN BOLIVIA

This is a legal figure for temporary business ventures between two or more persons. It does not have legal personality and does not require registration with the Registry of Commerce unless used as a joint investment vehicle for public projects, in which case a public deed and registration are required.

One or more associates operate under their own name and assume responsibility to third parties. Liability is joint and unlimited for those representing the association. In the absence of specific regulations, rules for general partnerships apply subsidiarily.

In summary, Bolivian commercial law offers six main types of business structures, each with characteristics adapted to different levels of liability, control, participation, and risk. Choosing the right structure can make the difference between efficient business management and unnecessary corporate conflict.