Buying or selling a company in Ecuador involves more than agreeing on a price. Corporate, tax, labor and regulatory obligations travel with the business, and many of them are not visible from the financial statements alone. Our team guides foreign and local clients through every stage of the transaction, from the first letter of intent to the registration of the new ownership.

Due Diligence

Before any acquisition, we review the target company to identify risks that may affect its value or the structure of the deal. Our review covers:

• Corporate standing before the Superintendence of Companies, bylaws, shareholder registry and minutes.
• Tax compliance before the Internal Revenue Service (SRI) and pending obligations or audits.
• Labor and social security obligations before the Ecuadorian Social Security Institute (IESS).
• Intellectual property portfolio: trademarks, patents, domain names and licenses, including their ownership and renewal status.
• Sanitary, environmental and municipal permits required for the company’s activity.
• Contracts, litigation, liens and encumbrances.

As one of the leading intellectual property firms in the country, we pay special attention to the brands and technology that often represent the main value of the business.

Structuring the Transaction

A company may be acquired through the purchase of its shares or participations, or through the purchase of its assets. Each alternative has different tax and liability consequences. Shares of a Corporation (Sociedad Anónima) are freely transferable, while the transfer of participations in a Limited Liability Company (Compañía Limitada) requires the unanimous consent of the company’s capital and must be executed by public deed. Together with our taxation lawyers and accounting team, we recommend the structure that best fits the client’s objectives.

Negotiation and Closing

We draft and negotiate letters of intent, confidentiality agreements, share or asset purchase agreements, representations and warranties, and transition agreements. At closing, we handle the transfer of shares or participations, the registration of the new ownership in the company’s books and before the Superintendence of Companies, and the appointment of new administrators and legal representatives.

Mergers, Spin-offs and Reorganizations

We also assist in mergers, spin-offs, capital increases and corporate reorganizations, including the approvals required before the Superintendence of Companies and, when the transaction qualifies as an economic concentration, before the Superintendence of Economic Competition (Superintendencia de Competencia Económica).

Selling Your Company

For sellers, we prepare the company before it goes to market by organizing its corporate, tax and intellectual property records, so the due diligence process runs smoothly and the value of the business is protected.