Since commerce is an activity in constant development we can assert that it is necessary to have regulation which isadequate and flexible to change because to the contrary the regulation would become obsolete and impossible to apply to day to day transactions. In the same way, commercial regulation must also promote inclusion of the merchant within the boundaries of the law so that their activities can contribute to the economic and entrepreneurial development of the country.
With the objective of updating commercial regulation in the country, the 27th of October of 2017, the Republic of Guatemala’s Congress issued decree number 10-2017, which contains the “Reforms to the Guatemala Code of Commerce, Decree Number 2-70 of the Republic’s Congress.” With the issue of said decree, the Republic’s Congress seeks to stimulate the promotion of commerce through free enterprise, the inclusion of entrepreneurs to the social economy, and incentives for the inscription of mercantile companies as a means in the course of trade.
Recognition of electronic means of communication
Within the substantial changes made to the Guatemalan Code of Commerce one can find the inclusion of the recognition of electronic means of distance communication as a sufficient and valid means so that a company can send communications to its partners and shareholders and that these communications would be considered to be completed. Likewise, said recognition is included in the subject of the decision-making process of a company, in which it is recognized that it may be participate or decisions may be made, as well as other communications sent between partners, between the company and its partners, via distance communication mediums.
While said reform supposes an innovative element to carry out communications within the recognized forms for the Code, it could be argued that the recognition made is unnecessary because the norm that regulates means of communication, being of a comprehensive nature, gives place for the inclusion of those which are recognized explicitly, which are also recognized by the “Law for the recognition of Communications and electronic Signatures.”
Requirements for the Shareholders Meeting and the Administrative Sessions
Another reform topic was the inclusion of the requirements for the content of the Shareholders Meeting and Administrative Session minutes,as is the minutes number, date, place, manner and record of the meeting verification of quorum and determination of attendants, agenda, decisions taken and number of votes in favor or against, time of conclusion and signature of President and Secretary of the assembly or session. Additionally, it recognizes expressly, that in case the minutes cannot be settled in the corresponding book it will be settled before a Notary, complying with the aforementioned requirements.
Minimum Capital Paid and Contributions in Cash
One of the reforms that produced an evident change was that related to the changes in initial paid capital. The initial paid capital was originally set at five thousand quetzals (Q5,000.00), established as the minimum amount necessary to constitute a company. However, with the reform the capital paid has been fixed at two hundred quetzals (Q200.00), constituting a notable change. The reason for said change is owed to the initiative to include informal merchants to formal and regulated commerce. Joined to this, is the change regarding the contributions in cash, establishing that when contributions are less than two thousand quetzals (Q2,000.00), they may be delivered to the administrators, while if they exceed said amount they must be deposited compulsorily in a banking institution.
Registration of Nominal Shares and Provisional Certificates
The article regarding the requirements for the registration of shareholders and provisional certificates was reformed to include the compulsion of the shareholder’s name, as well as any information necessary to identify him and the shares he possess. Likewise, the physical address and email of the shareholder were included. Elements which may have been included in practice but had no legal foothold until the reform.
Questions at Assembly
The right to formulate questions o require clarifications that are considered convenient regarding agenda points is included.
Amongst the substantial reforms that were made are those regarding registry topics, reforms that modify procedures and establish faster and more efficient processes that meet the speed of merchant traffic and facilitate commercial activity. An example of said reforms is the automation of inscription and registration processes of companies, the application for electronic patents and the electronic delivery of procedural supporting documents; which can be completed through the virtual platform which the General Merchant Register of the Republic of Guatemala will enable for this purpose. One can also see that through the reforms there is a decrease in deadlines, facilitating the processes and inscriptions or requested cancelations.
Another change made to the procedural path is a raise of the quantity in processes of undetermined value to make possible the Cassation Appeal, rising from two thousand quetzals (Q2,000.00) to four hundred thousand quetzals (Q400,000.00). Moreover, there is the inclusion of the resolution of relative controversy to executive titles for the regulation contained in the Code of Commerce in accordance with the stipulations of the Civil and Merchant Procedural Code of Guatemala.
The Code of Commerce of Guatemala, Decree Number 2-70, was issued in the 70s, contemplating within its regulation of the manners of commercial organization, mediums, or instruments of course of trade, as well as basis and principles of commercial contracts in general within the country. Said regulation establishes the legal and legislative basis for the exercise of formal commercial activity. With the purpose of updating the regulations of the Code of Commerce, the decree number 18-2017 is issued by the Congress of the Republic of Guatemala to include topics such as the automation of procedures, inscriptions and cancelations; presentation and expedition of documents electronically; change in the quantity for recourse in the procedural path, inclusion of requirements to be met at assemblies, shareholders registration, and registration of shares; recognition of electronic communications and changes in minimum capital for the constitution of companies. All these changes are directed at the promotion of formal commerce in the country to guarantee the free enterprise within the legal limits and contribute to the economy.
Sheyla Nadim Vargas Monroy