CHILE LAW AND PRACTICE Contributed by: Fernando Lathrop Aubert, Francisco Cárcamo Valdés, Jimena Illanes Diez, Joyce Jankelevich Mayer, Macarena Jaramillo Solís, Michelle Niedbalski Ramírez, Nicolás Maldonado Leyton and María Fernanda Heusser Errázuriz, Lathrop Mujica Herrera & Diez Abogado
in Congress. Public companies must comply with the rules that originally applied to them and those specific to their sector. For example, the State Bank of Chile must comply with the General Banking Law. 4.2 Relationship Between Companies and Minority Investors In corporations, unless there are preferences estab - lished in series of shares, shareholders have the same rights, but limited to the amount of their contribution. The regulations therefore provide rights to minor - ity shareholders and some tools against the actions of the majority. For example, the Corporations Law includes: • the right to information that the company must periodically provide to shareholders (such as the consolidated balance sheet); • the ability to make objections to the annual report; • the existence of an audit committee with a majority of independent directors; • the right to mandatory minimum dividends in case of profits; • authorisation by the shareholders’ meeting (two thirds of the shares with voting rights) to dispose of assets representing more than 50% of the com - pany’s equity; • certain transactions with related parties may give rise to legal actions against the company and directors; • a legal prohibition on conducting transactions exclusively benefiting the controller; and • the right of withdrawal for the minority when their rights are affected, such as in the case of a trans - formation, merger, creation of share preferences, etc, subject to prior payment of the value of their shares. In turn: • the Securities Market Law includes mechanisms for taking control that begins with the information that must be provided to minority shareholders; • the public offering process for the acquisition of shares is also regulated; • the CMF is the authority that ensures compliance with the rules regulating the market and, therefore,
protects the minority of corporations under its control; and • the FNE is responsible for controlling concentration operations. 4.3 Disclosure and Reporting Obligations The investor must register with the SII and submit a sworn declaration to start activities, along with prov - ing their domicile. Additionally, they must register the entry of foreign currency, indicating under which con - cept the capital is entered, to comply with Chapter XIV of the International Exchange Standards of the Central Bank of Chile. This Chapter regulates foreign capital transfers entering the country. The company, for its part, has certain special obliga - tions such as reporting the investments made (com - position, capital, and purpose of the company), along with providing the company’s background informa - tion. The capital market in Chile consists of the demand for securities, the supply of securities, and intermediar - ies. The demand includes both domestic and foreign investors, such as banks, financial companies, insur - ance companies, national reinsurance entities, fund managers, and private investors. Chile has two stock exchanges: the Santiago Stock Exchange and the Electronic Stock Exchange of Chile (BEC). These exchanges are supervised by the CMF, which merged with the Superintendency of Securities and Insurance in 2019. They also play a self-regulatory role, including suspending stock listings and sanction - ing members. 5. Capital Markets 5.1 Capital Markets Overview Primary sources of financing in Chile include: • bank financing – offers commercial loans, credit lines, leasing, and factoring for working capital and fixed asset acquisition; • government programmes – institutions such as Corporación de Fomento de la Producción (CORFO) and the Servicio de Cooperación Técnica
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