The main types of corporate structures are: (i) limited liability companies/partnerships (Sociedades de Responsabilidad Limitada (SRL)); (ii) stock corporations (Sociedades Anónimas (SA)); and (iii) companies by shares (Sociedades por Acciones (SpA)). SpAs have become one of the most common vehicles to structure a business in Chile. They afford shareholders flexibility in terms of structuring the company's management and they are the only legal entity in Chile that allow for only one shareholder. Furthermore, these types of entities were designed to facilitate venture capital and private equity.

A business can be acquired either by way of a share purchase (or "rights," in the case of an SRL) or an asset purchase. Alternative structures are mergers or consolidate companies.

Auction processes are more common now, particularly for sophisticated sellers that want to control the sale process and to optimize the purchase price.

Bid process letters are used and it is common to use indicative bid letters that are nonbinding during the first stage. The seller or its investment banker typically selects the best offers and then requires those bidders to submit a binding final offer.

The auction process typically proceeds as follows: (i) the seller or its banker sends an information memorandum to a list of potential bidders requesting an indicative offer within a certain timeframe; (ii) bidders submit indicative offers; (iii) the seller or investment banker selects the best offers and invites those selected bidders to conduct due diligence within a determined timeframe (normally using a virtual data room); (iv) the selected bidders are required to present a binding offer and a markup of a share purchase agreement previously provided by the seller; and (v) the seller selects the final buyer, which is called to sign the share purchase agreement (signing and closing may take place separately or simultaneously, depending on the transaction).

There are two main types of mergers in Chile: statutory and non-statutory. Mergers between different types of companies are allowed. As a rule, mergers proceed by canceling the shares/rights of the "absorbed" company, transferring the absorbed company's assets and liabilities to the "absorbing" one, issuing shares/increasing the capital of the absorbing company and transferring the shares/rights to the shareholders/partners of the absorbed company.

The SRL and the SpA are the most commonly used business entities in Chile.

There are three types of limited liability companies: (1) SRL; (2) SA; and (3) SpA.

The SRL must have at least two partners and a maximum of 50 partners. The SA must have a minimum of two shareholders and there is no limit on the total number of shareholders. The SpA may have only one shareholder and there is no limit on the number of shareholders.

Generally, all that is required to transfer the shares in an SA or an SpA is a private share transfer form or a public deed executed by both seller and buyer (in compliance with certain mandatory formalities as set out in the regulations to the Stock Corporations Law), followed by registration in the shareholders' registry of the company. A share certificate may be issued at the option of the new shareholder. A share purchase agreement is usually prepared to record the agreement of the parties with respect to their respective rights, obligations and liabilities in connection with the transaction.

When a business is being transferred via an asset purchase, each individual asset needs to be transferred in accordance with the formalities for a transfer that apply to that type of asset. For some assets, this will simply be a case of delivering the asset to the buyer, but in other cases, the formalities are more prescriptive, as in cases with assets that are subject to registration (e.g., real estate, intellectual property, motor vehicles or mining concessions). Therefore, it will be necessary to record the agreement in a public deed or include a provision in the purchase agreement governing the purchase of the business and its assets or in separate agreements, for the relevant formalities to be complied with. As with a share acquisition, there is usually an asset purchase agreement to record the respective rights, obligations and liabilities of the parties in connection with the transaction.