[ESTABLISHING A BUSINESS ENTITY IN COSTA RICA] 123
2.4 Administration A Board of Directors composed of at least a President, Secretary, and Treasurer shall administer the corporation. The representation and typically a total power of attorney are granted to the President under the Commercial Code. Still, such powers of attorney may be limited in their amount and functions as the shareholders decide. Other powers of attorney may be granted to other members of the Board. The positions outlined above are the minimum necessary to establish the entity; nevertheless, this does not exclude the possibility of appointing vice presidents, vocals (members at large), etc. 2.5 Comptroller It is required to appoint a Comptroller that will supervise the actions of the Board of Directors. Thus, the Comptroller cannot be related to any of the members of the Board of Directors. Also, the Comptroller cannot be a shareholder and will have no power of attorney to act on behalf of the corporation. 2.6 Resident Agent If none of the Directors vested with the Corporation's legal representation are domiciled in Costa Rica, the Corporation must appoint a Resident Agent who must be a lawyer with an open office in Costa Rica. This appointment is to receive legal notifications or notices on behalf of the company. 2.7 Shareholders´ Assemblies The shareholders´ assembly is the maximum body of authority of the corporation, and it is empowered to decide on all matters, including any amendments or modifications to the articles of incorporation, increasing, or reducing the Corporation’s Share Capital, granting powers of attorney, appointing and revoking persons as members of the Board of Directors, etc.
2.8 Minority Rights The protection of minority shareholders is stipulated in Title I, Third, and Seventh Chapters of the Commercial Code. Said regulation establishes as “minority shareholders” those owning shares equal to or less than ten percent (10%) of the share capital. Based on the above, the following details the rights of minority shareholders: ● Right to examine books, correspondence, and other documents of the corporation. Also, they may examine documents and contracts of those transactions that involve the acquisition, sale, mortgage, or pledge of company assets that represent a percentage equal to or greater than 10% of the total asset. In this sense, minority shareholders representing at least 10% of the share capital can appear before a judge to order an audit of the company. ● Right to request information during shareholders' meetings, such as, but not limited to, reports and clarifications regarding topics that are on the agenda. If this information is requested by Shareholders representing at least 10%, there will be no excuse for not providing the information on said grounds. ● Right to receive a report on the results of the company's annual fiscal year (approval of the financial statements) presented by the directors at the ordinary (annual) shareholders meeting. ● In cases where the Shareholders´ meeting has agreed to pay dividends, the partners will have the right to collect the dividends decided upon within three months after the meeting in which said dividends were approved.
ILN Corporate Group – Establishing a Business Entity Series
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