Volume 5, Number 22, Page 1

New Corporations Law in Peru

by Moises Castro-Toro

A new corporations law enacted in Peru has introduced changes to the structure of the various kinds of corporations. The most important change is in the realm of the Sociedad Anónima, or S.A. (joint stock company). Following are some of the most important changes introduced in the new corporations law with respect to S.A.’s.

Contributions

The new law is very clear in the sense that it does not allow for the contribution of services. Only goods or rights that can be “appraised economically” can be contributed.

Name of the Corporation

S.A.’s are considered to be capital corporations and consequently require a given name, or what is called denominación social. This differs from partnerships which are named with a razón social. The razón social consists of the name of one or more of the partners.

Corporation Bylaws

The previous law included several legal documents for the S.A., such as the corporation contract, the articles of incorporation, bylaws, etc. The new corporations law only recognizes two legal documents for creating a corporation:

1. Pacto Social (Partnership agreement), which includes the will of the parties creating the corporation, identification of the founders, the name of the corporation, the corporate purposes, domicile, duration, the amount of capital, etc.; and

2. Bylaws, which include regulations concerning the functioning, administration and extinction of the S.A.

Number of Partners

Under the previous corporations law, S.A.’s were required to have a minimum of three partners. The new law establishes a minimum of two partners which may be individuals or corporations.

Activities of the Corporation Prior to its Registration

Any activities by the S.A. done on its own behalf prior to registration are subject to the following conditions: a) that the corporation be registered, and b) that such activities be ratified by the S.A. during the three months following registration.

In the event that the S.A. does not ratify the above-mentioned activities in such period, it shall be deemed that the founders of the S.A. ratified the activities.

Subscribed and Paid Capital

According to the new law, for an S.A. to be incorporated it is necessary that the capital be totally subscribed. It is also necessary that at least 25 percent of each subscribed stock be paid. This also applies to any increase in the capital stock of the S.A.

The previous law granted votes for the purposes of quorum with respect to the paid capital but not the subscribed capital. This meant that if the stock were paid in full, the holder of such stock would have one vote; if s/he had paid only half of the stock, the stockholder would only bear half a vote.

The new law resolves this irregular situation by giving one vote for the totally subscribed capital, with payment of at least one-fourth of the total.

Delinquent Partners

The new law regulates the concept of delinquent partners more extensively. Some of the most important changes to the law in this area include the following:

• loss of voting rights;
• loss of the right to receive dividends;
• loss of the right to exercise right of preference to subscribe new stocks;
• impossibility of acquiring bonds that can be transformed into stocks; and
• loss of the option of suing other partners for damages.

Obligatory Annual Meeting

The inappropriate classification of general, ordinary and special meetings was deleted in the new law. An obligatory annual meeting is introduced in the new corporations law. Additional meetings may be scheduled during the year if such meetings are stipulated in the bylaws, or when the directors agree to hold more meetings, or if holders of more than 21 percent of the subscribed capital stock request it.

Directors

The new law ends the protracted discussion on whether a corporation may be a member of the directorate. The new law establishes that only individuals may be members of the directorate.

No-Presence Sessions

Under the new law, it is established that bylaws may permit decisions to be made by written vote. This eliminates the notion that directors always need to be present during the sessions.

Moises Castro-Toro is a partner in the Banker & Toro law firm, located in Lima, Peru. The firm’s practice areas include intellectual property, patents and trademarks, corporations, civil law, commercial law, administrative law and foreign trade.