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These stories were published Monday, April 25, 2005, in Vol. 5, No. 80
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Corporations have at least six of them
Just what the heck are all those books for?
By Garland M. Baker 
Special to A.M. Costa Rica

Everyone doing business or owning assets in Costa Rica using a company is required to have legal books. 

The books, referred to in Spanish as libros legales, are obtained at the stationery store and then taken to the tax authority, Dirección General de Tributación or DGT for short. To obtain the agency’s blessing on the books, company operators fill out a form called Solicitud de Legalización de Libros. This translates into English as application to legalize books.

Tributación puts a notation and legal stamps on the first page of each book.

Legalizing books for the first time usually goes hand-in-hand with filing Form D-140 called Declaración de Inscripción, Modificación y Desinscripción en el Registro de Contribuyentes. This translates into English as declaration of enrollment, modification, and un-enrollment in the tax contributor’s registry.

Whether a company is active and paying taxes each year or just holding property (and not required to file an income tax return or pay tax), the company is required to have legal books.

Most people have heard of these books but have no clue as to what they do and why they are important.  Very often they have been misplaced and, unbeknown to the owner, serve as a home for hungry termites. 

There are around 12 types of books.  However, most companies only have five or six.  The run-of-the-mill  sociedad anomima, usually referred to as an S.A., has six, and a limited company, referred to as an S.R.L., has five.

The books common to both company structures are: 1) Actas Asamblea de Socios or Actas Asamblea de Cuotistas (stockholders’ or shareholders’ minutes); 2)  Actas Registro de Socios or Registro de Cuotistas (registry of stockholders or shareholders); 3) Diario (general journal); 4) Mayor (general ledger); 5) Inventario y Balances (inventory and balances). 

The book that is unique to an S.A. is the Actas Junta Directiva or Actas Consejo Administration, the directors’ or administrators’ minutes.  This minute book records board of director decisions and is unique to this company structure because limited companies do not have directors only a manager.

Why are these books so important?  Why can’t the termites have them?

Two classes divide the legal books.  One class is the actas or minutes, three books for an S.A. and two books for an S.R.L.  The other class is accounting, three books for both S.A.s and S.R.L.s.

The actas are important because without them and actas written in the minute book, movements in the Registro Nacional or national registry cannot be made legally.

Notaries are required to have minutes up-to-date and written in the minute books to make most changes to a company that requires public registration.

This means a company is dead-in-the-water without books if important changes are needed to corporate structure, addresses, board of director makeup, ownership, and other corporate makeup.

Making an important change in the makeup of 

A.M. Costa Rica photo
Believe it or not, these are the books of a corporation worth millions of dollars.

an S.A. or S.R.L. is impossible without having the books available.

The accounting books are important because Costa Rica’s Commerce Code, Article 251, requires the special books as part of doing business.

Most people think all this seems really dumb: writing by hand in books in the computer age.

Actually, there is some good sense to the laws mandating legal books.  True, the origins come from times before computers, but hand-written entries in books are harder to "fudge" than easy-to-manipulate computer programs, applications and data.

Costa Rica’s national registry is full of fraud and mistakes regarding property ownership and company records. Having a good hand-written record of important transactions can save the day in some cases.

It is the responsibly of a company’s secretary to keep the minute books current. This includes bugging the company attorney to death until any appropriate registrations are filed, and most importantly, duly registered at the National Registry.  It is the responsibility of the treasurer to keep the accounting books up-to-date.  In an S.R.L., all three responsibilities fall on the shoulders of whoever is designated as the manager. 

One great benefit of keeping a company’s corporate records, including legal books, in perfect order is that such a company can be transferred quickly and easily to another person or entity as in a sale and without paying any kind of transfer tax.  This can be a real tax savings when selling property or other assets.

Those who own corporations should rescue their books and make sure they accurately match the important decisions of the company.  They should keep the books in a safe place or with an honest professional so they are handy when needed.  The effort could keep corporation owners out of trouble and/or save them money down the road.

Garland M. Baker is a 33-year resident of Costa Rica who provides multidisciplinary professional services to the international community. Reach him at info@crexpertise.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Lic. Allan Garro provides the legal review.  Reach him at crlaw@licgarro.com.  Copyright 2005, use without permission prohibited.

 
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U.S. citizens get warning
over Nicaraguan unrest

By the A.M. Costa Rica staff
and special reports

The U.S. State Department is warning U.S. citizens about continuing civil unrest and potentially violent demonstrations in Nicaragua.

"A recent price increase in public transportation fares has resulted in numerous protests by students," said a message from the State Department.  "Bus and taxi drivers have demonstrated in support of the increased fares. These demonstrations have on occasion turned violent and have required large-scale police intervention to restore order. Additionally, the demonstrations have occasionally affected access to the airport and caused traffic congestion."

While most of the violence and demonstrations have centered in Managua, there is potential for these demonstrations to spread to other parts of the country, said the State Department.

American residents and visitors in Nicaragua were urged to remain vigilant and to avoid crowds and demonstrations. 

The State Department encouraged Americans living or traveling in Nicaragua to register with the U.S. Embassy through the State Department's travel registration Web site. U.S. citizens also can call the embassy or make a personal visit. The Embassy is located at Kilometer 41/2 (4.5) Carretera Sur, Managua. The telephone numbers are (505) 266-6010 or 268-0123. The embassy has a Web page.

Gasoline is going up
about 10 percent

By the A.M. Costa Rica staff

What is as certain as death and taxes is an increase in the price of gasoline.

The Authoridad Reguladora de los Servicios Públicos said that it has approved an average increase of 36.50 colons, about eight U.S. cents, per liter. The amount is a bit more than 10 per cent.

The authority said that the increase follows a $9 per barrel hike in the world price of petroleum and a devaluation from March 23 to April 6 of four colons with respect to the U.S. dollar.

Regular goes from 364 colons a liter (77.6 cents) to 402 (85.7 cents). Super goes from 381 colons (81 cents) to 420 colons (89.5 cents).

U.S. delegation visiting
lawmakers, Pacheco today

By the A.M. Costa Rica staff

A group of U.S. congressmen will be in town today. They are scheduled to meet with deputies at the Asamblea Nacional and later with President Abel Pacheco at Casa Presidencial.

Although the reason for the visit has not been spelled out clearly, the members of Congress are part of the public relations campaign being waged to achieve passage of the Central American free trade treaty in Costa Rica.

Three more months
for Carlos Alvarado

By the A.M. Costa Rica staff

Banco Elca president Carlos Alberto Alvarado Moya has to spend three more months in jail. That was a decision announced Friday by the Juzgado Penal del II Circuito Judicial de San José.

Alvardo is being investigated by the Fiscalía de Delitos y Anticorrupción on allegations of fraud, conspiracy and fraudulent administration.

Officials closed down Banco Elca, more property called Corporación Elca, S.A., June 29 because of insolvency. The bank is in liquidation now.

Alvarado will serve preventative detention until at least July 22, according to the judicial order. 

Our Readers' opinions

He hopes Costa Rica
will benefit from pact

Dear A.M. Costa Rica:

To read the two different sides of the Central American free trade agreement argument causes one to ask what is really going on. I can imagine that there are some jolly green giants out there in the world (China to name a billion) and that perhaps there is safety in numbers. I have come to respect and admire Costa Rica. It has many things that make it what it is. The environment, the people and the philosophy create a synergy that it is unique and truly wonderful. 

CAFTA is a regional trade agreement with a few U.S. country specific bilateral exceptions. Its long term impact may be the uniting of North, Central and South Americas into one trading voice. This may be good given the Chinese impact on the world’s natural resources. The U.S. is heavy in the agreement, and it is subject to incredible political influences these will impact the CAFTA countries which may be beneficial including on a political and social level in the Central American countries. 

Not that the U.S. doesn’t have crime and corruption; it exists everywhere in the world and for historic reasons more than anything else Costa Rica and other Central American countries have a bum rap for more than their fair share of these social ills. But the main thrust of CAFTA philosophy is to strengthen freedom and democracy. No one can argue with this goal and it should be welcomed in all corners of the world. If it has collateral positive impacts on crime and corruption then it should be embraced.

There are pros and cons to the impact on labor. In reality, to the U.S. detriment, CAFTA will help these aspects of life in Central America. People need to work at transforming or adding value to natural resources. This is still the way of the industrial world.

The greatest impacts on all CAFTA parties will be impacts to the environment and to intellectual property rights. These have become two of the most important topics in the world as a whole and they are directly addressed in CAFTA. 

All in all only time will tell. Costa Rica as a country, not as a bunch of different special interests, may benefit from this agreement, and I hope it does benefit.

Joseph James Verce 
Durango, Colorado
Professional Directory
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The best way to describe this weekend: A big Whoops!
By the A.M. Costa Rica staff

This was the weekend of Murphy’s Law in Costa Rica.

Anything that could go wrong did go wrong.

For starters the roof fell in on union leaders who had threatened not to recognize the February 2006 presidential election if Oscar Arias Sanchez won. The threat, linked to the free trade pact, was considered close to treason.

Then two law enforcement officials, one the head of traffic enforcement in Jacó, were arrested. The traffic policeman faces an allegation that he took a confiscated motorcycle out of the official impound and gave it to a girlfriend.

The second officer, a Judicial Investigating Organization employee assigned to capture wanted fugitives, was detained after other police said they saw him conversing with a wanted fugitive in downtown San José.

Late Friday night a short circuit torched the Megasuper grocery in La Fortuna de San Carlos and firemen had to travel more than 40 kms. to reach the blaze. The 

Instituto Nacional de Seguros, the insurance monopoly that also includes firemen, had turned down an offer of free land for a fire station in the community a year ago because officials thought there was little need.

Early Saturday a coordinated police raid took into custody eight persons and confiscated nearly three tons of cocaine. That was in extreme northeastern Costa Rica. The suspects are believed to have been on a drug smuggling fastboat that had engine trouble two weeks ago. 

When they off-loaded the drug packages police happened by and confiscated the boat so they could not leave.

Sunday was the day that a seer/psychic was put on a plane and sent out of the country. Apparently the man could not predict that immigration officials would grab him for working here illegally on a tourist visa.

Sunday, too, was the day that the Compañía Nacional de Fuerza y Luz S.A., the power company, turned off electricity to vast areas of the downtown to hook up the new underground lines. Those with businesses and work to do there ended up cooling their heels for 12 hours.


 
Telling the truth can be uncomfortable, this dicho says
La verdad no peca, pero incomoda

"Telling the truth is not a sin, but it can be uncomfortable," especially if you are the one whose "truth" is being told. Some people use this little dicho as an excuse for saying whatever is on their minds no matter how offensive it might be to those within earshot.

I was not very fond of the teacher who taught the fifth and sixth grades, primarily because she always preferred my twin brother to me. Sra. Lillian made a point of making me feel bad whenever possible, and she used this particular dicho with predictable regularity in doing so. She wanted to create a separation between my brother, whom I dearly loved, and me. He didn’t like this situation either but it was hard for him to do anything to throttle Sra. Lillian’s efforts to drive a wedge between us. 

Then came the day of elementary school graduation. Sra. Lillian wanted to have her picture taken with each of her students, but I flatly refused. My brother asked me in front of her why I didn’t want my picture taken with Sra Lillian? I said simply, but honestly, that I did not like her and I’d rather not have anything around that would remind me of her and how miserable she had made my life for the past two years. 

Of course this upset Sra. Lillian tremendously, but when she began to protest I simply replied: La verdad no peca pero incomoda. This was very embarrassing for her because an official from the Ministerio de Educación Pública was there doing teacher evaluations that day. 

Now, sometimes I wish I’d had that darn picture taken because after so many years I still can’t forget the horrified expression on Sra. Lillian’s face when I took my final revenge in front of the evaluator from the education ministry.  I don’t even know if she is still alive, but if she is, I wonder if Sra. Lillian remembers me too.

Maybe telling the truth is not a sin, but it’s also true that we may not always be the best ones to tell it. Not everyone can handle the truth, neither among the tellers nor the hearers. 

An acquaintance of mine had a complete plastic surgery treatment done. Before the surgery I had thought to myself, yes that could certainly be beneficial, though of course I didn’t say so out loud at the time. Several 

The
way we say it

By Daniel Soto

weeks later this person dropped by the house and asked me what I thought of the results. I said the change still seemed rather minimal, but that I was certain the ultimate results would be quite dramatically youthful when the procedure was finally completed. 

Oops! The procedure had already been totally completed a month before. As you might imagine, our relationship has been rather strained since then, and there hasn’t been much I could do to repair the damage. I may have told the truth, but it certainly turned out to be uncomfortable for us both. 

My sister often likes to say, "it sounds terrible, but it’s the truth" when we’re sitting afternoons chatting and drinking coffee. She never fails to amaze me with her memory. She’s one of those people who can describe in minute detail every aspect of an event, right down to what everyone involved was wearing. 

"Oh yes," she says with authority. "I remember the accident very well. It was a Friday night, August 23rd. Luis was wearing his blue suit, and you where wearing that red jacket that dad brought you from Miami." 

This is probably true, though I don’t remember that she was even there. She even remembers the name of the medicine my grandmother used to take before going to bed at night, and my sister can’t have been more than 3 or 4 years old at the time. All these truths of hers sometimes make me a little uncomfortable. 

My goodness! What else does she remember? I sometimes wonder. There are those truths, after all, that are better left unsaid.


 
In case you missed it:
A.M. Costa Rica, April 5, 2005
Our readership more than doubles in one year
By the A.M. Costa Rica staff

A.M. Costa Rica set another readership record in March when the newspaper registered 2.16 million hits. That was a 22.9 percent increase over February and a 106 percent increase over March 2004, the first month the newspaper exceeded a million hits.

Other statistics had similar increases.

Some 397,368 individual pages were viewed by 99,351 readers. And 45,435 of those readers were registered as unique, which means they were only counted once regardless of how many times they visited the pages in a single day. 

The statistics are maintained by the Internet service provider in the United States where A.M. Costa Rica is hosted. The hosting company keeps track of visits independent of A.M. Costa Rica.

The statistical programs screen out hits and visits by mechanical means, other computers and automated Web crawlers.

The statistics show that the average viewer sees about four pages at every visit to the paper. 

Said Jay Brodell, editor:

"Our dramatic increase in readership over the last three and a half years is no surprise to our advertisers who are getting more and more business from the wave of retirees and would-be retirees who are looking at Costa Rica as a new home and need solid, daily information.

"It’s a new world, and our progressive advertisers recognize that."

A.M. Costa Rica statistics are available on a page that is updated every month HERE!


 

 
Giant stash of cocaine unearthed by police after raid
By the A.M. Costa Rica staff

A U.S. citizen was among the eight persons arrested in what Costa Rican officials are calling the biggest seizure of cocaine on the nation’s soil.

A coordinated force of police agencies raided a coconut plantation in extreme northeast Costa Rica bout 5:30 a.m. Saturday. In addition to eight persons, police unearthed 2,550 kilos or 5,610 pounds of neatly packaged cocaine.

The raid was by the Policía de Control de Drogas, the Fuerza Pública, the Servicio Nacional de Guardacostas, the Unidad de Zapadores and Vigilancia Aérea. All are within the Ministerio de Gobernación, Policía y Seguridad Pública. Also involved was the Dirección Nacional de Inteligencia.

Rogelio Ramos, the minister, confirmed the raid from his office in San José Saturday and credited the operation Mar, Tierra y Aire that has been in progress since February in the Caribbean with providing the leads to the seizure and arrests. The location where the drug packages were found is near the Laguna de Samay, a strip of land between the Tortuguero canal and the Barra de Colorado.

Ramos identified the U.S. citizen involved by the last name of Urns. The identification is preliminary. He also said that the eight persons had modern communications equipment and mechanical tools.

Four Colombians and two Nicaraguans also were detained. The eighth person, a Costa Rican, is believed to be a minor.

Officials said that the drug packages were on a four-engine fastboat of the type used by smugglers. However, for some reason the boat ended up on Costa Rican soil. Mechanical failure is suspected.

The drug packages were off-loaded and buried. A short time later, local police, perhaps guided by information from air patrols, came upon the boat and confiscated it.  That left those who were smuggling the drugs high and dry.

A constant police patrol is believed to have kept associates from arriving with another boat or by making contact in some other way.

Police have seized larger shipments of cocaine, but those cases involved boats at sea. This is the largest seizure on land.


 
Good fortune runs out for fortune-teller from Chile
By the A.M. Costa Rica staff

A man from Chile who called himself the "professor in reading the Tarot" was deported Sunday by air.

The man is Ylan Ben Wohl Escala, who called himself Professor Amarildo and ran a fortune-telling establishment on Paseo Colón until he was picked up April 12.

The Dirección General de Migración official canceled his tourism visa, which led to the deportation. Officials said that working as a fortune-teller was inconsistent with his status as a tourist.

Wohl collected 8,000 colons for a reading, some $17. He entered Costa Rica April 5, said officials.  He was ordered deported April 14 but had five days to appeal the order. He did not, said officials.

An undercover agent fingered the foreigner and his business, said officials.  Wohl was surprised and detained at his Paseo Colón place of business Friday.

Badilla said the man had contracted matrimony with a Costa Rican woman Thursday. He said he was seeking an investigation of the circumstances of the marriage and of the lawyer who performed the ceremony at both the lawyers' association and the one for notaries.


 
Two law officers are facing allegations of illegalities themselves 
By the A.M. Costa Rica staff

Two police officials find themselves suspects after being arrested Friday.

In Jacó the local chief of the Policía de Tránsito, a 35-year-old man named Hernández was detained, according to the Judicial Investigating Organization.

The transit policeman was facing an allegation of a form of embezzlement in that he is accused of taking a 

confiscated motorbike and giving it to his girlfriend. 

In San José a member of the capture squad of the Judicial Investigating Organization was himself captured.  The man, identified by the last name of López, is facing an allegation of dereliction of duty.

By chance, a team of agents was following a man wanted for fraud when they saw him hold a conversation with López, who made no effort to apprehend him.


 

 
International groups worry about rights in Ecuador
By the A.M. Costa Rica wire services
and special reports

The international community is closely following political developments in Ecuador.

The United Nations joined the United States in calling for all parties in Ecuador to show restraint following the April 20 removal by Ecuador's Congress of the country's president, Lucio Gutiérrez, and the installation of Alfredo Palacio, formerly Ecuador's vice president, as the new head of state.

U.N. Secretary-General Kofi Annan has issued several statements urging respect for the rule of law in Ecuador.

Annan said he remains concerned about continuing violence in Ecuador, and advised Ecuador to initiate an "urgent dialogue towards the full restoration of the rule of law" in order for the country to achieve political, social and economic stability.

He also said the United Nations would continue "to support all Ecuadorians in their efforts to achieve that end."

White House Press Secretary Scott McClellan, briefing reporters last week, called the current political situation in Ecuador "very fluid."

McClellan said the United States repeatedly has called for "peaceful, inclusive, respectful and constructive dialogue during this time in Ecuador." He said the United States continues "to urge all parties and all politicians and activists to work together to find solutions that will strengthen the democratic institutions in Ecuador. We want to see constitutional stability and the rule of law prevail."

Several international organizations involved with protecting press freedom and related concerns worldwide say human rights are threatened amid the political turmoil and violence in Ecuador.

In a statement, the advocacy group for press freedom, Reporters Without Borders, condemned violence against the country's media, including threats, shootings and sabotage attempts against radio station La Luna in Ecuador's capital, Quito. The Paris-based group also deplored the death of Chilean freelance photographer Julio Augusto Garcia during a demonstration in Quito April 19.

Reporters Without Borders said Garcia apparently died of a heart attack caused by ingesting tear gas. Police used the tear gas to disperse demonstrators, who were calling for Gutiérrez's resignation.

Reporters Without Borders said there was no guarantee that removing Gutiérrez from office and replacing him with Palacio "will end this siege and anarchy that has exposed both pro-government and opposition media to reprisals."

Another group, Human Rights Watch, said Ecuador's Palacio must move quickly to ensure respect for human rights.

In a statement, the New York-based group said Ecuador's authorities must do "everything in their power to restore public confidence in the rule of law, and get Ecuador's democratic institutions working."

During an April 21 OAS special session, Ecuador's Jaime Barberis said his country is "ready and open to receive the collaboration" of that hemispheric organization in "consolidating the rule of law and fomenting national dialogue and compromise."

Another global group, Amnesty International, said Ecuador's government must "place human rights very firmly at the top" of the country's political agenda.

The London-based group said "guaranteeing respect for human rights, the independence of the judiciary and the rule of law are key measures that must be undertaken by the authorities as a matter of urgency."

Meanwhile, former president Gutiérrez flew off Sunday to exile in Brazil. He left Quito on a Brazilian air force plane.

Mr. Gutiérrez had been in the residence of Brazil's ambassador since Ecuador's congress voted him from office Wednesday after a week of huge street protests.  Protesters had been camped outside the residence demanding that Gutiérrez be tried for abuse of power.

A state prosecutor also had ordered his arrest in connection with the deaths of two people in the recent clashes between police and protesters. 

Ecuador's political crisis began in December after Gutiérrez restructured the country's supreme court with his allies.


 
Fighting in Colombia raises concern for Indian groups
Special to A.M. Costa Rica

Indian groups caught up in Colombia's internal conflict face tragedy from violent attacks that are leading to mass displacement of their people, says a U.N. refugee agency.

In a statement Friday, the Office for the U.N. High Commissioner for Refugees said the fighting could cause some smaller and more vulnerable indigenous groups and their cultures to disappear.

The refugee agency said the fighting uprooted 3,500 Nasa people in the southwest part of the nation. In the northwest, 4,000 Embera people are at imminent risk of displacement because of fighting between the nation's largest leftist guerrilla group, the Revolutionary Armed Forces of Colombia, and a right-wing paramilitary group called the United Self-Defense Forces of Colombia.

The U.S. State Department has designated both groups as terrorist organizations.

Ron Redmond, a U.N. spokesman, said the "tragedy afflicting the indigenous peoples remains largely 

invisible," adding, "They often become displaced within their remote regions of origin as they try to preserve ties to their ancestral lands, or else they flee into other remote areas where they cannot be easily detected."

The National Indigenous Organization of Colombia has reported the murder or disappearance of more than 20 Indian leaders thus far in 2005.

The Andean country's more than 80 indigenous groups together make up a population of just under 1 million people, said the U.N. Although these groups represent only 2 to 3 percent of Colombia's total population, they comprise as much as 8 percent of the more than 2 million of the country's internally displaced persons. Virtually all of the indigenous groups have been victims of forced displacement or are at serious risk of being displaced from their ancestral lands, according to the U.S. agency.

Because Indian identity and culture are closely linked to the land, these communities suffer irreversible damage when forced to flee, said the U.N., adding that this can mean loss of traditional language and cultural patterns.


 
Digging fails to locate missing Australian student in Tamarindo
By the A.M. Costa Rica staff

Police followed up on a persistent rumor as to the whereabouts of Brendan Dobbins, the 24-year-old Australian who has been missing from Tamarindo since March 4.

Agents of the Judicial Investigating Organization spent half a day Saturday digging in a wooded area frequented by drug users not far from the center of Tamarindo. It was here, the rumors said, that Dobbins was buried. 

Dobbins vanished after being last seen walking in the early morning on the beach at Playa Chechenia in Tamarindo. The beach is on the Pacific coast.

As soon as his disappearance was publicized, individuals came forward with rumors as to what had happened. Because he was not carrying his passport or a significant amount of money, robbery generally was discounted. 

The sea has not surrendered his body, something that might have happened if he took a morning swim and got into trouble.

Officials are anxious to solve the case because the parents of Dobbins are visiting the country. The vacationing Dobbins was an exchange student from Australia and was studying in Florida.  No persuasive theory has been advanced as to why anyone would kill Dobbins.


 
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