Dissolution and liquidation of companies in the Dominican Republic

Formally closing a company is a process as important as its incorporation. The dissolution and liquidation of companies in the Dominican Republic guarantees the termination of legal personality and compliance with all legal and tax obligations.

In practice, many Dominican companies cease operations without completing this procedure, remaining active in public registries and with the General Directorate of Internal Revenue (DGII). This situation generates unnecessary costs and risks: from the obligation to renew the business registration or file periodic tax returns, to the accumulation of tax or labor debts. Therefore, it is essential to plan and execute an orderly closure that provides legal and financial security to both partners and directors.

Legal framework for the dissolution and liquidation of companies in the Dominican Republic

The legal framework governing this process is found in Law No. 479-08 on Commercial Companies and Limited Liability Individual Enterprises, supplemented by regulations from the DGII (General Directorate of Business Administration) and the Chambers of Commerce and Production. These provisions apply to various corporate structures, such as Limited Liability Companies (LLCs), Public Limited Companies (SAs), Simplified Public Limited Companies (SASs), and Limited Liability Individual Enterprises (EIRLs).

Although each type of company has its own specific characteristics, the basic steps are common: initiating a dissolution agreement, appointing a liquidator, conducting the liquidation of assets and liabilities, completing registration and tax procedures, and finally declaring the company’s final closure.

Dissolution agreement and the role of the liquidator

The starting point is the agreement among partners or shareholders to dissolve the company, which must be approved at an extraordinary general meeting. At this meeting, the members can grant the directors’ discharge and appoint a liquidator who will be responsible for executing and supervising the process. In some cases, an auditor is also appointed, whose role is to oversee the proper management of funds during the liquidation process.

Once the agreement is approved, the company officially enters liquidation and must add this status to its corporate name. From that moment on, the directors cease their duties and the liquidator assumes their representation. His or her task is to prepare, together with the outgoing directors, an initial inventory and balance sheet; keep the accounting and corporate records up-to-date; carry out the necessary transactions to close pending issues; dispose of company assets; collect outstanding debts; comply with tax, labor, and commercial obligations; and finally, distribute the remaining assets among the partners in proportion to their participation.

Notice of dissolution and liquidation stage

Upon appointment of the liquidator, the liquidator must file the documents relating to the dissolution with the Commercial Registry and publish a notice of dissolution in a national newspaper. The purpose is to notify third parties and creditors of the commencement of the process and indicate the place where liquidation-related notifications will be received.

During this stage, the company must not issue new tax receipts, except for transactions strictly related to the liquidation process. Once these transactions are completed, the liquidator prepares a final report, which will be presented at a second extraordinary meeting, where the shareholders approve the accounts, grant a discharge, and declare the liquidation closed. If an auditor was appointed, they must also submit their report and receive formal approval.

Registration procedures before the Chamber of Commerce

Once the final accounts have been approved, the liquidator must file them with the Commercial Registry of the corresponding Chamber of Commerce and publish a second notice in a national circulation media, this time announcing the final closure of the process. These steps are essential for formally canceling the Commercial Registry.

On average, this process is usually completed within seven to fifteen business days, depending on the Chamber of Commerce in question. For more practical information, please visit the Santo Domingo Chamber of Commerce and Production website.

Tax procedures before the DGII

Once the registration closure is complete, the company must formalize its disengagement from the tax system. To do so, it must be up to date with all its tax obligations. The DGII ( General Directorate of Internal Revenue ) requires the submission of Form RC-02, which is used to update data and cancel the National Taxpayer Registry (RNC).

In addition, the company must file the final Income Tax Return (IR-2), marked “final,” within sixty days of ceasing operations. A notarized letter of guarantee is also required, in which the company’s legal representative assumes responsibility for any future debt that may arise after the closing.

During this stage, the company must declare and pay the taxes generated up to the date of cessation, including income tax, property tax, withholding taxes, and other taxes. Only after verifying that everything is in order does the DGII authorize the definitive cancellation of the RNC. The process can take between 45 and 60 days, depending on the complexity of the case.

Importance of an orderly closure

Failure to properly complete the dissolution and liquidation of companies in the Dominican Republic can have serious consequences, including joint liability of partners and directors to third parties, the accumulation of tax and labor debts, the inability to formally close the company, or even complications in future business ventures.

Therefore, having specialized legal and tax advice is essential to ensure that the process is carried out correctly, safely, and transparently, avoiding risks that could be prolonged over time.

Conclusion

The dissolution and liquidation of companies in the Dominican Republic is a complex procedure, but absolutely necessary when a business ceases to operate or fulfills its purpose. Carrying out this process in an orderly and compliant manner guarantees the security of partners, transparency for third parties, and the stability of the economic and legal system.

In an environment where formality and regulatory compliance are increasingly valued, proper closing not only frees partners from future liabilities but also strengthens confidence in the country’s institutions and business climate.