On October 20, 2023, the “Decree by which several provisions of the General Corporations Law are amended” was published in the Official Gazette. The purpose of the decree is to modernize and incorporate electronic means and technology to the corporate and administrative operations of the companies for the holding of Shareholders’ or Partners’ Meetings and Board Sessions.

The articles of the General Corporations Law (“LGSM”) affected by the respective reform are as follows: Article 81, second paragraph; first paragraph of 186 and 194; addition of paragraph XIV to article 60, second paragraph to article 75, second and third paragraphs to article 80, third paragraph to article 82, fifth paragraph to article 143, third paragraph to article 178; second, third, and fourth paragraphs to article 179.

Effective as of the reform, corporations may hold meetings and sessions remotely through electronic, optical or any other technology, in the understanding that the participation of all or part of the partners, shareholders, board members or their attorneys-in-fact will be allowed as long as the participation of the attendees is simultaneous and allows an interaction functionally equivalent to a face-to-face meeting.

It is important to mention that it is an essential requirement that an amendment be made to the corporate by-laws in order to contemplate this means of execution, as well as the specific terms that must be complied with, if applicable.

In the cases in which such mechanism is applied for holding meetings and sessions, the reform provides that it shall not be understood that such meetings and sessions are held out of the corporate domicile and, therefore, their validity shall not be affected by such factor, as well as that signatures may be autographed or electronic.

On another note, the amendment to Article 81 modifies the means of calling General Partners’ Meetings of Limited Liability Companies (Sociedades de Responsabilidad Limitada). As of the effective date of this provision, the calls shall be made through publication in the electronic system of the Ministry of Economy within the time period set forth in the bylaws or, in the absence thereof, eight days prior to the date of the meeting.

The reform to the LGSM became effective on September 21, 2023, except for the provisions of Article 81, referred to in the preceding paragraph, which will become effective six months after the publication of the Decree.

Hoping that the foregoing information is useful to you, our firm will be pleased to advise your company and perform the necessary legal actions or updating your company’s by-laws in order to implement electronic mechanisms in the holding of shareholders/partners meetings and board meetings.