Individual Limited Liability Enterprise (E.I.R.L.)

According to Law No. 19.857, an E.I.R.L. is a legal entity with its own assets, separate from those of its owner.
It is always considered a commercial entity and is governed by the Chilean Commercial Code, regardless of its corporate purpose.
It may engage in any civil or commercial activities, except those reserved by law for corporations.

Benefits of an Individual Limited Liability Enterprise (E.I.R.L.)

Forming an E.I.R.L. provides several advantages, as it allows the separation of the owner’s personal assets from those of the enterprise.
The owner’s liability is limited to the amount of the capital contribution.
Additionally, the enterprise has its own economic life and is responsible for its own obligations, provided they fall within its corporate purpose.

The administration of the E.I.R.L. belongs to its owner, who represents the enterprise in all matters related to its purpose,
with full powers of administration and disposal. However, a general manager may be appointed by notarial deed, which must be registered in the Commercial Registry when applicable.

When can the administrator of an E.I.R.L. be personally liable for their acts?

Yes, personal liability may arise in specific cases, for example:

– When acts or contracts are executed without reference to the company’s name or representation, the administrator is personally liable for the resulting obligations.
– When the company performs simulated acts, hides assets, or acknowledges fictitious debts.
– When the owner receives income from the company that does not correspond to its actual operations or makes improper withdrawals.
– When the owner, administrators, or legal representatives have been convicted of bankruptcy-related crimes.