Limited Liability Company (Ltda.) in El Salvador
Formation and capital
- Name: either the names of one or more partners or a freely chosen name, followed by "Limitada" or "Ltda.". Without it, the partners are personally liable.
- Deed: formed by public deed before a Salvadoran notary, registered at the Registry of Commerce.
- Capital: at least USD 2,000, divided into participations of $1 or multiples of $1. Contributions of work only are not accepted.
- Payment: at least 5% of each participation at formation, by certified or cashier's cheque from a local bank shown to the notary. The rest within one year of registration, or five years when the subscribed capital exceeds USD 100,000.
Source: Commercial Code, consolidated text (Legislative Assembly, PDF, in Spanish)1
Management and partners
- Managers: one or more managers (gerentes), partners or outsiders, appointed for a fixed or indefinite term. If none is appointed, all partners manage the company.
- Transfers: a partner can transfer a participation or admit a new partner only with the consent of all the other partners, unless the deed allows a majority.
- Right of first refusal: when a transfer to an outsider is approved, the other partners have 15 days to buy first.
- Capital increases: partners have a preferential right to subscribe in proportion to their participations, to be used within 15 days.
Source: Commercial Code, consolidated text (Legislative Assembly, PDF, in Spanish)1
When it fits
- Family businesses and small groups of partners who want to control who joins.
- Owners who prefer managers to a board of directors.
- For a single owner, the simplified joint-stock company is the only company that can be formed alone.
Source: Commercial Code, consolidated text (Legislative Assembly, PDF, in Spanish); Decree No. 905 of 6 December 2023 reforming the Commercial Code (Legislative Assembly, PDF, in Spanish); PwC: Doing Business in El Salvador 20261,2,3
Frequently Asked Questions
What is a Ltda. in El Salvador?
The sociedad de responsabilidad limitada is a company of persons: partners hold participations rather than shares, and admitting a new partner needs the consent of the others.
What capital does a limited liability company need?
At least USD 2,000, with 5% of each participation paid at formation. The rest is paid within one year, or five years when the capital exceeds USD 100,000.
Who runs a limited liability company?
One or more managers (gerentes), partners or outsiders. If none is appointed, all partners manage the company.
Sources
- Commercial Code, consolidated text (Legislative Assembly, PDF, in Spanish)
- Decree No. 905 of 6 December 2023 reforming the Commercial Code (Legislative Assembly, PDF, in Spanish)
- PwC: Doing Business in El Salvador 2026 (PDF)
Figures checked 8 November 2026. Prepared by InvestSalvador.com for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.
