Initiative to Reform the General Law of Commercial Entities Regarding Telematic Meetings

In December 2021, a bill amending and adding various provisions to the General Law of Commercial Entities (hereinafter, the “LSGM”) regarding Telematic Meetings (hereinafter, the “Initiative”) was presented.

The foregoing, considering that the Commercial Code, since 2003, establishes the possibility of execution of commercial legal acts through electronic means and, despite this, the LGSM continues to be very absent in regulation regarding the holding of meetings of shareholders or partners with them; in fact, this option is only available to the shareholder(s) of the Simplified Stock Company (“SAS”), as stated in article 266 of the LGSM.

“Article 266.- The Shareholders’ Meeting is the supreme body of the simplified stock company, and all its shareholders form it.

The resolutions of the Shareholders’ Meeting will be taken by majority votes and it may be agreed that the meetings be held in person or by electronic means if an information system is established in terms of the provisions of article 89 of the Commercial Code. In any case, a record book of resolutions must be kept.

When the simplified stock company is made up of a single shareholder, he will be the supreme body of the company.”

Likewise, it is impossible to deny that Covid-19 has changed the paradigm in electronic matters; The pandemic taught us to trust telematic media, realizing that they are allies, not only in everyday life but also in business.

Due to the foregoing, the Initiative seeks to provide that the meetings of partners or shareholders, and the sessions of the administrative bodies of the commercial entities can be carried out through telematic means, either totally or partially, by incorporating this possibility in the corporate bylaws.

Regarding the requirement of the LGSM for the holding of meetings at the “registered office”, it is important to consider that this will not be completely removed, but made more flexible. The intention of the original legislator was to protect the right to vote, granting certainty to the partners or shareholders about the place where they would have to attend to deliberate and vote since there was no other way to do it. Thus, it is considered that, nowadays, electronic means do not affect legal certainty, but rather grant greater possibilities of attendance and exercise of the right to vote.

Even though on March 9, 2022, in commissions of the Chamber of Deputies, the opinion of the Initiative was approved and, on March 31 of the same month, so was the draft Decree, being turned over to the Senate, approval by the latter is still pending.

Notwithstanding the above, considering the value of the reform and its undoubted importance for corporate governance and development, at Vega, Guerrero & Asociados we consider it extremely advisable to remain pending as to the consummation of the Initiative, to be able to proceed, at the appropriate time, with a statutory reform.


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