GUATEMALA Law and Practice Contributed by: Ignacio Andrade Aycinena, Alejandro Solares Solares, Claudia Pontaza Rubio and Lester Meda Ruano, Lex Atlas
tion for dividend distribution 15 days before the annual mandatory shareholder meeting, which must take place 90 days after expiration of the
Tax treatment of derivatives is not regulated and may cause, for Guatemalan tax purposes, non- deductibility of derivatives transactions. 4.5 Filing/Reporting Obligations Under the Law of the Securities and Merchandise Market, filing/reporting obligations depend on the nature of the derivatives offer. When offered to more than 35 persons, it will be deemed a public offer and certain requirements (such as registration at a Stock Exchange Registry and for the issuer to obtain a risk qualification) shall apply. When offered to 35 people or less, it will be deemed private, and the offer should be made directly to each of them. Neither the law nor the regulations contain any derivative-specific registration requirements for public offerings of derivatives. There are no competition laws mandating the registration of derivatives or filing obligations. Derivative agreements remain unregulated as securities, no securities disclosure exists regard - ing such agreements and when existing they are usually dealt with in extra-market activities under the securities law. 4.6 Transparency There is no legal obligation for a shareholder to notify the purpose of the acquisition. The only legal requirement is to inform of the intention to issue shares of the company so that exist - ing shareholders can exercise their pre-emptive right under Article 127 of the Commercial Code. For issuers of shares that are registered secu - rities for public offering purposes, a notice of intent to acquire shares is a requirement under Article 39 of the Securities Law with its general
annual period of the company. 4.3 Hurdles to Stakebuilding
The Commerce Code, Decree 2-70, stipulates mandatory and minimum reporting standards for all types of companies, meaning a company can introduce additional reporting requirements in their articles of incorporation as long as the minimum is complied with. There are no other hurdles to stakebuilding in Guatemala. Informa - tion rights are minimum requirements under the law and cannot be waived in articles of incor - poration. There are no confidential statutory rules for reporting standards, but certain entities have introduced articles of incorporation with man - dated confidentiality rules for company informa - tion. 4.4 Dealings in Derivatives In Guatemala, dealing in derivatives is allowed. Some derivative regulation exists under the Law of the Securities Market and its Amendments. The only regulated derivatives are conditional and term agreements under the current Secu - rities Law of Guatemala, Decree 34-96 and its amendments, with very general provisions in the law and no contract-specific type of registration requirements, except if such derivatives are sub - ject to a public offering. Swaps agreements and other derivatives are unregulated and, usually, allowed under innom - inate agreements allowed under the Code of Commerce and the Securities Law.
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