On October 31, 2017, the Decree 18-2017 was published in the Official Gazette of the Republic of Guatemala, the amendments to the Commerce Code (Decree No. 2-70), coming into force on January 29, 2018.
As Lawyers in LatinAlliance Guatemala, these modifications are important for our clients, since they entail the reduction of time, costs and procedures; and the simplification of processes related to the mercantile activities that they develop. – Likewise, these amendments constitute incentives to improve investment in the country; helps the entrepreneurship and job creation; and provide an adequate environment for informal traders to easily enter in the formal sector.
Among the most important changes brought by these legal amendments, we can mention:
1. In three business days, the registration of a company in the Mercantile Registry may be accomplished.
2. The publications ordered by the Commerce Code, shall be made through an electronic communication system of the Mercantile Registry, it won´t be necessary to publish it in the Official Gazette.
3. Initial paid capital. The amount of the initial paid capital for new companies will be at least two hundred quetzales (Q.200.00).
4. Subscribed capital. At the time of signing shares, it is essential that each shareholder pay at least twenty-five percent (25%) of the nominal value of each share subscribed.
4.1. Cash contributions may be delivered to one or more administrators or deposited in a bank account with the name of the company; in both cases, that must be stated in the social deed. The bank deposit will be mandatory when the total cash contributions exceed the amount of two thousand quetzales (Q. 2,000.00). When the company has a bank account, the cash that is in safekeeping of one or several administrators, must be deposited in it.
4.2. Contributions of registrable assets. Companies that have contributions of registrable assets (real estate, vehicles, etc.), must be submitted to the Mercantile Registry, the documentation that demonstrates the transfer of ownership of the assets within a term of three (3) months, which may be extended by three (3) more months if the interested party request it. In case it´s not done, the registration of the company will be canceled.
5. Patents may be issued physically or electronically, with security measures without any cost.
6. Remote communications. The participation or decision votes in assemblies, meetings, administrative sessions; the sending of calls; and any communication between the partners or between the partners and the company; can be by any method of remote communication, which should be stated in the social deed.
7. Capitalization of the legal reserve. The legal reserve may not be distributed in any way between the partners, until the liquidation of the company. However, the surplus of five percent (5%) may be capitalized annually when the l legal reserve exceeds fifteen percent (15%) of the paid capital at the end of the previous fiscal year, without prejudice to the obligation of the company, to continue separating the annual five percent (5%) assigned to the legal reserve.
8. Book of Proceedings. The Administration, regardless it´s composed of one or several Administrators, will be obligated to keep a Minute Book in which the resolutions adopted will be recorded. If for any reason it can´t be recorded in the Book, it will be done with a Notary and it must be included as an annex, within a period not exceeding fifteen (15) business days from the date on which it´s authorized, under the responsibility of the Administration.
9. Registration of Foreign Companies. Companies legally established abroad that want to operate in Guatemala or have branches or agencies, must request it to the Mercantile Registry, the only entity in charge of granting the authorization. The company must start operations in a period of one (1) year from the date of registration; otherwise, the authorization will expire.
For more information, please contact LatinAlliance Guatemalan Lawyers, at the following addresses: [email protected] ; [email protected]