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Draft Reforms to the Commercial Code
[/vc_column_text][us_separator][vc_column_text]On June 23rd of this year, at the initiative of the President of the Republic through the Minister of Finance, the Draft Reforms to the Commercial Code regarding the rules governing the validity of bearer shares and founder bonds were sent to the Legislative Assembly of El Salvador. These reforms aim to eliminate the power granted by the Commercial Code regarding the issuance of "bearer" securities, which, if approved, must always be registered. The bill contemplates reforms to articles 134, 153, 155 paragraph one, 158, 164 paragraph one, 212 paragraph one, and 338 of the Commercial Code. Furthermore, it establishes that all companies that have issued founder's shares or bonds under the "bearer" modality to date will be required to convert them into registered securities, considering the owners of these securities to be those who possess them and present them for conversion. Additionally, it makes the amendment to the articles of incorporation mandatory in order to align it with these reforms, having one year to do so, starting from the date this decree enters into force. This draft reform imposes a series of "limitations" on companies in the event of failure to comply with the share conversion and/or the amendment to the agreement, including: Blocking of the Single Taxpayer Registry, and non-performance of active, passive, or neutral transactions whose capital is represented by bearer shares for those companies regulated by the Superintendency of the Financial System. It also establishes that companies that do not comply with the provisions within six months after the expiration of the initial deadline must immediately initiate the dissolution and liquidation process. This draft reform is still under review by the Legislative Assembly.
Written by:
[/vc_column_text][us_person image=”9076″ name=”Adriana López” role=”Asociada” link=”url:http%3A%2F%2Flexincorp.com%2Fequipo_elsalvador%2Fadriana-lopez%2F|title:Adriana%20L%C3%B3pez||” layout=”cards” img_size=”full”][/us_person][/vc_column][/vc_row]
