Corporate Debt Liability and Shareholder Rights

Liability for Corporate Debts

The responsibility of partners is personal and unlimited, meaning partners are liable with all their assets. This is a vicarious or secondary liability; the assets of the partners can only be targeted after the full execution of the company's assets. Furthermore, the partners are jointly and severally liable.

Fundamental Rights of the Partner

• Right to participate in the distribution of earnings and in the equity resulting from liquidation.
• Pre-emptive rights in the creation of new ventures or new share issues.
• Right to attend and vote at general meetings and to challenge resolutions.
• Right to information.

Officers of the Board

Unless otherwise provided in the bylaws, the President and Secretary of the general meeting shall be those of the administration. Failing that, they shall be appointed by the shareholders in attendance at the beginning of the meeting.

Formation of the List of Attendees

1. Before addressing the agenda, a list of attendees will be formed, stating the nature of representation for each and the number of shares (own or others) attending.
2. At the end of the list, the number of members present or represented and the amount of capital they hold shall be shown, specifying the partners entitled to vote.
3. In limited liability companies, the list of attendees must be included in the report.

Constitution of the Corporation Board

Quorum Requirements for General Meetings

In corporations, the general meeting of shareholders shall be validly constituted on the first call if the shareholders present or represented possess at least twenty-five percent of the share capital with voting rights. The statutes may provide for a higher quorum.

On the second call, the board shall be validly constituted regardless of the capital present, unless the statutes set a specific quorum, which must be lower than that required for the first call.

Reinforced Quorum for Special Cases

In corporations, for the ordinary or extraordinary general meeting to validly approve a capital increase or reduction, any amendment to the bylaws, the issuance of bonds, the elimination or limitation of pre-emptive rights, as well as transformation, merger, division, assignment of assets and liabilities, or the transfer of residence abroad, a reinforced quorum is required:

• First Call: Shareholders present or represented holding at least fifty percent of the subscribed voting capital.
• Second Call: At least twenty-five percent of the capital.

The bylaws may raise the quorum requirements provided for in the preceding paragraphs.