I hope you are enjoying and producing a lot this week. I leave you with a video that I think is useful to you, so that with this information you have understanding and thus can act on any situation where you might need to.
Have an amazing rest of the week!
LIABILITIES OF FOREIGN LLCs AND CORPORATION IN PUERTO RICO – TRANSCRIPT
Hello and welcome to Puerto Rico Legal Blog. My name is Santiago Lampón and I am a lawyer and notary in Puerto Rico, this episode I am going to cover the use of LLCs, Limited Liability Companies or corporations or any other kind of entity for purposes of a real estate transaction or to do businesses in Puerto Rico.
The main focus of this video is the protection, protection to the shareholders or to the members of a company. Now when someone looks at why a LLC or company or corporation was created typically it is because they want some kind of distance, some kind of separation between the owners, meaning the members or the stockholders or shareholders, and the business entity with regards to potential liability. In this regards in Puerto Rico when you have a company meaning an LLC or corporation created under Puerto Rico law, not a problem, it is created under Puerto Rico law it operates per se Puerto Rico corporate law and the shareholders and the members are protected, but when you have a company or LLC or corporation created elsewhere, under Puerto Rico law it is called foreign entity.
Now, foreign when I mention this to clients or any individuals that are having any discussion on his subject it is usually interpreted to mean outside of the United States. Foreign for the purposes of Puerto Rico corporate law, means any entity created anywhere other than Puerto Rico. It could be Florida, it could be New York, it could be Canada, it could be France, it doesn’t matter. If it was not created, registered or originated in Puerto Rico it is a foreign entity.
When you are purchasing a property in Puerto Rico or doing business in Puerto Rico, you may do so without registering the entity. You may and you can get away with it, but the truth of the matter is that under corporate law if that entity isn’t registered to do business in Puerto Rico and the official term is ” authorized to do business in Puerto Rico”, if it is not registered under Puerto Rico law the members, the owners of the company are personally liable for any claims against the entity. Yeah, that is the way it is. If a corporation or a limited liability company is not registered to do business, authorized to do businesses under Puerto Rico law, any claim against the company automatically the owners, meaning the members or stockholders are personally liable for such a claim.
It is very simple. Do you have a property in Puerto Rico? It is owned by an LLC or corporation? You rent it or do business in Puerto Rico? Register it. Don’t leave it as a foreign company. Register it and get your authorization to do business in Puerto Rico.
My name is Santiago Lampón. I am a lawyer and notary in Puerto Rico. I hope you have enjoyed this video. If you have any questions you can send me an email and you can post your questions on this page and I will get to it as soon as I can and gladly give you the response that I can. Have a great day.