As of the amended to the Public Registry Law, new obligations have been regulated for all companies that are registered before the Public Registry of Commerce and that should be considered relevant during their operation.
First, we will address the provisions that were already regulated in the Commercial Code of our country, in which we find the following obligations:
- Election of the Board of Directors
- Appointment of the Vigilant
- Approval of Financial Statements
- Holding of an Ordinary Shareholders’ Meeting
Although each of these matters is usually regulated specifically in each Deed of Incorporation and Bylaws, the Code of Commerce (hereinafter “CC”) establishes the following in general:
In relation to the Election of the Board of Directors, in accordance with Article 244 CC the election of Directors must be made among the same partners, for a fixed and determined term, should not exceed 10 years. It is important to consider that although each company determines the term of its Board of Directors and that even in several Deeds of Incorporation it is expressly included that if after the expiration of the term no new election is held, it will be understood that the elected Board of Directors continue in office; however, we recommend that the Board of Directors be renewed once the term has expired because there are probabilities that some institutions do not accept the automatic renewal, which in case of rejection could delay the management that is being processed…