The world health situation has forced preventive actions, such as social distancing, to avoid the spread of the COVID-19 virus. The Government of the Republic of Guatemala has taken a similar position, applying express prohibitions regarding the holding of any type of event and limitation on the freedom of movement.

In view of this, it is important to review the provisions applicable to the holding of Shareholder´s Meetings and Partners’ Meetings in mercantile companies, since their holding implies the meeting of the majority of shareholders or partners in the same place, which, according to the criterion of the Mercantile Registry, contravenes the current Presidential provisions.

Presidential Provisions

  • On April 20th, 2020, the Presidential Provisions that reform those issued on April 12th, 2020 were published. Within the latter, the prohibition of holding events of all kinds, for any number of people and anywhere was stablish; on the other hand, social or physical distancing is regulated, as well as the permanence of people in their residences.

 

Mercantile Registry of the Republic of Guatemala

  • The Mercantile Registry of the Republic of Guatemala published a statement in which it establishes that mercantile companies that do not have electronic means of communication regulated in their articles of incorporation,  may not request calls for holding Shareholder´s Meetings, Partner´s Meetings nor Administrative Sessions.  Moreover, the Registry stablishes that face-to-face meetings cannot be called for either because according to its opinion, it may contravene the Presidential Provisions mentioned above.

 

Decree 2-70 of the Congress of the Republic of Guatemala, Commercial Code of Guatemala

  • Pursuant to Article 15 of the Commercial Code, the participation or decision-making in shareholders ‘meetings, partners’ meetings and administrative sessions, as well as the sending of calls for these meetings, can be carried out by any method of remote communication, as stipulated in the articles of incorporation. In order to use technological instruments and platforms for distance communication, it is important to highlight that the articles of incorporation of mercantile companies must include the mechanisms to ensure the authenticity and veracity of communications; if the articles of incorporation do not foresee anything on that regard, then the articles of incorporation must be amendment and registered before the Mercantile Registry.

 

Therefore, in accordance with the Presidential Provisions regarding social distancing and preventive actions to avoid the spread of the COVID-19 virus, as well as the limitation of calls published by the Mercantile Registry of the Republic of Guatemala, and with the purpose to safeguard the continuity of operations in mercantile companies, it is recommended that the holding of shareholder´s meetings, partner´s meetings and administrative sessions be carried out by means of remote communication or platforms, or by means of power of attorney issued by the shareholders or partners in favor of the Administrative Body, if their articles of incorporation so allow it.

 

If you require legal advice on regards to the effectiveness of remote communications for your company, do not hesitate to contact our legal team at the following emails: [email protected], [email protected], [email protected], [email protected]; or directly to the number 2225-7000.

 

We have a 24/7 service to address your legal queries related to the effects of COVID-19 in your company. Contact us through our Help Desk for immediate assistance at: [email protected]. Access to our Media Room for further information about legal aspects related to Coronavirus in Central America at this link.