Legal format and structure

So, with these ratios we have enough to conclude that the capacity of our assets to generate renting is much higher than the 5%, which is positive. But, the roe is lower than “ROA” which means it is not convenient for us to get into debts.

We consider more important the information the “ROA” is providing us for the fact that the ROE does not consider the “leverage ratio” and for “ROA”; the focus is on give the general vision of the company without considering the other financing sources.

The following table represents the characteristics of the LLC and then a brief explanation of it:

Table 46. Characteristics of the LLC

Source: own elaboration

The Activity of Limited Liability Company is regulated by the law Ley General de Sociedades, Law nº 26887. And, to choose the social reason or denomination it is important to state that the company is owned by: Michelle Silva and Maria Jordana; apart from possible partners and associates helping from outside with the activity. Its name is Alwa Eco-hotel LLC. The brand name is Alwa which is a clearer way for clients to remember.

Then, to verify the social reason or denomination the company will follow up the “Control de Homonimia” which is helpful to the company’s name to find out if there are other enterprises using the same denomination. So, in our case we will have to pay 18€ to help us identify if the denomination is unique. The duty would be the following:

Table 47. Cost of verify denomination company

Source: own elaboration

To start a new business in the country of Bolivia, what is suggested is to pay taxes in the country.

By paying theses taxes, tributes, the procedure is done according to the law of Bolivia based on making an inscription in “Guía de Trámite para inscribir una Sociedad de Responsabilidad Limitada - SRL en el Registro de Comercio de Bolivia”.

Table 48. Example of how to describe the product/service when declaring

Source: own elaboration

Later, the step is to make an inscription of the company in “El Registro de Comercio de Bolivia”

which in this case the following table defines it well:

Table 49. Price of inscription company

Source: own elaboration

But regarding this table and to be able to make the inscription there are a few requirements that must be fulfilled. Some examples of those are the following:

1. Formulario nº 0020 de solicitud de Matrícula de Comercio.

2. Opening balance signed by the legal agent and the professional who intervenes, accompanying the respective original professional solvency given by el Colegio de Contadores o Auditores.

3. Proof of public escripture of social constitution, original or photocopy legalized. It must contain the aspects mentioned in the Art. 127 from Código de Comercio.

Concerning the taxes that have to be paid so that we accomplish the hospitality sector there are other taxes to be considered. Thus, respecting the hospitality sector is the RND Nº 101900000012 which includes Hotels, Aparthotels, Hostels, Accommodations, Cabins and Holiday Refugees. This legislation has entered validity since January 2020 and it has new obligations. The hotel infrastructures have to achieve several information organized in a document Excel.

First, “Características generales de la casa matriz y sucursales” that includes the general data from the hotel business; management, NIT, denomination, type, category, etc. Second,

“Información del servicio de hotelería u hospedaje’’ where there it is included the guest profiles, income, exit, pernoctation per night, travel agency, among others; together with the invoice of means of transportation. Third, “Información de facturación del servicio de hotelería u hospedaje’’ which refers to the selling invoice, payment method, among others.

The last information needed to be achieved is what makes references to “Comisiones a agencias u otros” that’s in respect to the travel agencies data, commissions, payment methods and others related to that. All this information of legislation based on hotel industry is encountered in

“Bolivia Impuestos”.

Another aspect that it is relevant to have in mind is the one’s applied for the requirements of opening in hotel establishments in Bolivia (Hotel from 1 to 5 STARS). These establishments have been created to provide services to the tourists including food, beverages, recreations and other complements in relation to the hotel categories. This has been stated in RM N°021/2016 and the requirements are the following:

- Carta de Solicitud para la inscripción, registro y apertura para la Autorización de Funcionamiento Turístico.

- Testimonio de Constitución

- Testimonio de Poder del Representante Legal

- Fotocopia simple de Cédula de Identidad del Propietario y/o Representante Legal - Inscripción en el Registro de Comercio (FUNDEMPRESA) sin clasificación.

- Licencia de Funcionamiento de Actividad Económica

- Balance General de Apertura (Nuevo) y Capital última gestión

- Presentación de las características generales del Establecimiento de Hospedaje Turístico - Listado del Personal

- Solicitud de Inspección Ocular

- Presentar Declaración Jurada “SIRETUR”

The final step refers to the fulfilment of forms, questionnaires and deliver documentation. We attach the Bolivian trade registration form in the annexes section [See Annex 4 ].

In addition, what it is also important to take into consideration is the cancelation politics, regulations when a guest makes a cancelation, annulment of the reservation. First, it is important to state that the Accommodation Tourist Establishments they have to maintain the reservation by confirming it. They have the obligation to keep the reservation until the arranged hour with the host, except cancelation or postponement. If the cancelation from guests it is done 15 days before the date of the reservation, the hotel establishment has to collect from the guest the 75% of the total rate of the reservation. On the contrary, the hotel establishment can also realize a cancelation of a reservation when there is a motive of “force majeure” adequately justified by the hotel establishment.

Related to that, the establishment is obliged to offer to the guest the option of substitution for another service of similar characteristics in regards of category and quality. Or if not, there is the chance from the hotel establishment’ party to make a refund of the entire anticipate cancelled for the reservation; to the guest.