How much annual income can a Simplified Limited Company (SAS) receive by 2024?

What is the annual income limit for a Simplified Limited Company (SAS) for 2024?

On December 28, 2023, the Ministry of Economy issued an Agreement to define the limit of total annual revenues for Simplified Stock Companies, as established in Article 260 of the General Law on Mercantile Companies.

This Agreement reveals the upgrade factor for the year 2024, fixed at 1.0432. This factor is the result of precise calculations based on the National Consumer Price Index (INPC), and is decisive in establishing the economic limits applicable to Simplified Stock Companies.

In practical terms, this update factor determines that, as of January 1, 2024, the total annual revenues of a Simplified Limited Company may not exceed the amount of $7,076,469.38 (seven million seventy-six thousand four hundred sixty-nine pesos 38/100 M.N.).

What are the consequences of exceeding this limit?

If a Simplified Limited Company (SAS) exceeds the established annual income limit, you will lose the benefit of being considered as SAS and it will have to be subject to the regulations and requirements of a traditional company, and must modify its structure and transform into another type of commercial company, such as a Public Limited Company (S.A.) or a Limited Liability Company (S. de R.L.), among others. If you do not make the modification, The corporate veil will be lifted which protects shareholders and each of them will be liable to third parties for the payment and fulfillment of any of the Company's obligations.

Remember that, when setting up an SAS, we will be subject to various obligations, such as:

• Disseminate in the Electronic System of Commercial Company Publications the following:
  • The Notice when all of the share capital has been subscribed and paid.
  • The Call for the Shareholders' Meeting.
  • The Annual Report on the Company's financial situation.
  • The Notice regarding the annotations made in the stock record book of the increase or decrease in variable share capital.
  • The contracts concluded between the sole shareholder and the company.
• All of the shares must be paid within the period established by the shareholders, in a term not exceeding one year.
• Keep the Company's stock record book.
• Transform to another traditional commercial company once the amount of annual income allowed is exceeded.

While Simplified Limited Companies have their advantages, meeting their obligations will be crucial to avoid negative consequences.

If you are looking for more information, send us an email to d.rodriguez@rmgsc.com