Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Puerto Rico. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
|No.||Procedure||Time to Complete||Associated Costs|
|1||Check online the uniqueness of the company name and Register online at the PR Department of State to obtain a business certificate||1 day||$150 + $10 for the issuance of the Certificate of Existence|
|2||Apply for an employer identification number (EIN) with the Internal Revenue Service of the United States and the PR Department of Treasury||1 day||no charge|
|3||Apply for a municipal business license (patente municipal)||1 day||no charge|
|4||Request unemployment and disability account numbers from the PR Department of Labor and Human Resources (Departamento del Trabajo y Recursos Humanos)||1 day||no charge|
|5||Subscribe to a workmen’s insurance policy||1 day||no charge|
|6||File with the Registry of Merchants and Business, the Commercial Development Administration||1 day||no charge|