What is a legal representative in Latin America?

In Latin America and the Caribbean, a legal representative acts as the legal face of the company and is the signatory for all company operational activities; in turn they have the legal responsibility to ensure the good operation and standing of the company. This exciting region has many opportunities for business, yet has some local differences to other areas which you should be aware of.

In doing so the individual assumes certain personal legal liabilities and hence it is a position that is not taken lightly. For example, if a company fails to pay all of its the relevant corporate taxes and/or fails to act in good faith then the local authorities may chose to take legal action, civil and/or criminal against both the company as well as the legal representative directly.

At Biz Latin Hub we can provide a legal representative for you anywhere across the region as part of our company formation services. With 19 offices across Latin America and the Caribbean, our array of back office services can help you anywhere in the area – a place we know better than anyone else.

Who can be appointed as the company legal representative?

Generally speaking, the person must be a local national or a foreign national with the legal right to live and work in the country.

While we encourage our clients to appoint someone within their business to fulfill this role, sometimes this isn’t possible due to the specified position requirements; as such Biz Latin Hub can offer this service by appointing a suitably experienced and trusted senior lawyer to act as a Legal Rep for the client.

Often clients will ask us to provide a legal representative during the timely process in which a foreign employee receives an appropriate visa and/or gained trust in a local employee who is going to take on this role.

What do they do?

Simply put, your legal representative will be the person who acts for the company in the eyes of the law. These means they have a great deal of responsibility and is therefore an incredibly serious role. You will need someone dependable and trustworthy to fill this position, as they are essentially the company embodied in a single legal point.

This means they will typically be responsible for signing off on official accounting documents such as corporate registration and compliancy requirements. They will sign contracts on behalf of the company – with employees and other businesses alike. They are likely to be ultimately accountable for any legal actions against the organization.

If you hire a specialist to do this job for you rather than using an exisiting employee, the brief may widen slightly to include advisory duties relating to local law. It may also include applying for and updating local governmental databases such as UBO compliancy.

Some issues to be aware of

The appointment of the legal representative is a very important decision for both the company and the individual, with serious implications if the wrong person is appointed as they are accorded the legal right by the shareholders to manage and to make decisions on behalf the company.

Upon appointment or election, the powers are typically given by a formally notarized document (nominally within the company bylaws).

Nevertheless, we have encountered instances where the legal representative has acted without the prior approval of the shareholders and have completed actions such as to sell company assets, sign contracts without permission and/or to grant company resources to help friends and/or family.

Thus it is important that when selecting a legal representative that much consideration is given to confirming what powers are granted and ensure that the person selected is a trusted partner, employee, and/or contact of the companies owners.

Why is a legal representative so important?

A fundamental part of the incorporation process, and a reason for the importance of consulting legal experts in order to define the power and control handed to the legal representative.

It is crucial to ensure that the powers granted to the legal representative are adequate to allow them to complete their required professional functions, and on the other hand, are adequately restricted to ensure the risk is minimized.

For example, a legal representative might need to obtain the owners signature prior to the sale of any company assets or they might need written authorisation to complete bank transfers in excess of USD$5,000 per day.

FAQs on legal representation in Latin America and the Caribbean

Do I need a legal representative in every country?

Yes. Even if you don’t appoint a specialist, someone in the company will have to be designated as the legal representative.

Does the legal representative have to be a national of the country?

Usually, this is not the case, but it will require residency at the very least. However, this may depend on country-specific regulations, especially for potentially sensitive industries, fields or regions.

What can my legal representative do?

It is crucial to ensure that the powers granted are adequate to allow them to complete their required professional functions, and on the other hand, are adequately restricted to ensure the risk is minimized. This means they will typically be responsible for signing off on official accounting documents such as corporate registration and compliancy requirements. They will sign contracts on behalf of the company – with employees and other businesses alike. They are likely to be ultimately accountable for any legal actions against the organization.

Why do I need a legal representative?

Simply put, they act for the company in the eyes of the law. These means they have a great deal of responsibility and is therefore an incredibly serious role. You will need someone dependable and trustworthy to fill this position, as they are essentially the company embodied in a single legal point.

Are there any problems to be aware of?

We have encountered instances where the legal representative has acted without the prior approval of the shareholders and have completed actions such as to sell company assets, sign contracts without permission and/or to grant company resources to help friends and/or family. Thus it is important that much consideration is given to confirming what powers are granted and ensure that the person selected is a trusted partner, employee, and/or contact of the companies owners.

Biz Latin Hub can be your legal representative

Biz Latin Hub has extensive experience with the company incorporation process across Latin America. In addition to this, we have a comprehensive array of back office services across Latin America and the Caribbean. With 18 dedicated offices throughout the region, we can provide legal and financial support to help you stay compliant with all local laws.

if you have any questions or concerns about the incorporation process and/or the role of the legal representative feel free to contact us.