Home Costa Rica Legal TopicsCorporate Law Can you hold a virtual shareholder meeting for a Costa Rica corporation?

Can you hold a virtual shareholder meeting for a Costa Rica corporation?

by rpetersen

The answer is yes. If you have a Costa Rican corporation and you need to convene a shareholder meeting virtually, you can now do so based on the official regulation from the National Registry of Costa Rica number D.P.J. -001-2020. The regulation will allow shareholders of a Costa Rican corporation to hold a shareholder meeting using platforms such as Google Meet, Zoom, Microsoft Teams, Skype, or any other conferencing software that can record the session.

For the meeting to be recognized as valid, the regulation and legal opinion of the office of the Attorney General of Costa Rica requires that the meeting be: (1) Simultaneous. This means all shareholders must be logged in the session at the same time. (2) Interactivity. The conferencing platform must allow for all members to interact in real-time. (3) The integrity of the communications. The audio and video quality must be such that it allows all parties to see and hear each other in the deliberations of the shareholder Assembly.

Now for the shareholder resolution to affect third parties, it is still going to require the involvement of a Costa Rican Notary Public to give public faith that the meeting took place. The law still requires that the meeting be logged into the shareholder minutes book and certified by a Notary Public.

The full translation of the regulation is set forth below:

The Register of Legal Entities wants to be at the forefront of issues related to the use of technological advances as a means of registration, promoting the dynamism required by the entities that form part of the economic and social system of our country. To do so, we need to adapt to its new ways and paradigms, both technological and the need for an evolutionary application of the legal system legal framework that allows standards to be adjusted to the social reality of the time when they have to be applied. As for the issue of holding assemblies by electronic means, it should the official position of the state’s legal sponsor, be it the Attorney General’s Office through the Opinion C-298-2007 of 28th August 2007, signed by Magda Inés Rojas Chaves, Attorney General. In that opinion the Attorney General advises on the topics of Telepresence, Teleconferencing, Videoconference, Virtual Sessions, Simultaneity Principle, Deliberation. The development of telecommunications has made it possible to overcome the concept of “physical presence”, for the development of meetings, which causes the emergence of the so-called “telepresence or virtual presence”. Since there is no legal rule governing such meetings, is that the use of such communication must be done in a way that guarantees the rights of all concerned.

MINISTRY OF JUSTICE AND PEACE

The optimal technology for achieving virtual presence is videoconferencing, which is defined as a multimedia connection between two or more people who can see, hear and exchange resources (graphic information, images, transfer of files, video and voice) even though they are physically separated. Shareholder meetings and non-physical presence sessions are feasible, so long as it is guaranteed that the means of communication used allows the identification of all participants who intervene, deliberate and decide, and which should be recorded in the respective minutes of the corporation. The technological means used to carry out the assembly or session must allow for proof of the deliberations made and the decisions taken, by means of recordings, which shall be kept and guarded under the responsibility of the persons of each legal entity. Essential requirements of the means of communication used are as follows aspects:

Simultaneous: The participants who make up the assembly must attend simultaneously so that the composition of the group is uniform and the decisions are attributable to the governing body. This participation is inherent in the deliberations and the procedure of formation of the assembly that has gathered to deliberate. This will provide the essence of “being together”, through mechanisms of telepresence.
Interactivity: This mechanism allows two-way communication and synchronous in real time, i.e. it is transmitted live from one point to another or between several points at once.
Integrity: The communication must be integral, allowing the sending of images, allowing you to see the people you are interacting with, to hear their voice out loud and the quality of the data transmission. It must optimize the accuracy of the transmission and registration of documents pertaining to the meeting.

Integrity: The communication must be integral, allowing the sending of image, allowing you to see the people you interact with, hear their voice out loud quality and allowing data transmission. Therefore, oriented to solve existing gaps and in order to optimize the accuracy of the qualification and registration of documents pertaining to this registration, guaranteeing legal certainty and ensuring that the publicity provided is in accordance with the wording of the documents, which are in accordance with the law, shall be provides the following:

1. Holding of assemblies and sessions by electronic means. Provided that the statutes of a legal entity do not make it impossible to hold their assemblies by the use of electronic means. In that case they shall be allowed provided that the electronic medium used is capable of allow the participation of all the members of the entity, as well as guarantees the simultaneity, interactivity and integrality between the communication of all the participants. The fulfilment of this situation must be established in the respective shareholder minutes book.
All aspects of the company bylaw must be respected with regard to the convening of the meetings and the holding of these meetings. They must be recorded outlining the technological means used to hold the meeting. The same applies to the holding of board meetings of directors or managers.

2. Public Faith by a Notary Public.

The considerations set forth in Opinion C-298-2007 of the Attorney General’s Office General of the Republic are not exclusive in accordance with the requirements. The existing customary provisions of Articles 152, 158, 162, 174 and 184 of the Commercial Code, Article 15 of the Regulations to the Law on Associations, in relation to Article 10 of Civil Code, and the notarial public faith of article 31 of the Notarial Code. As such it remains the obligation that any minutes of the shareholder meetings or board of directors / administrative meetings, shall be duly recorded and signed in the respective book, and the notary public shall to attest to this situation, as this gives authenticity to the content of the document and to the facts described in the development of the assembly/session.

In addition to the above, the Notary Public must testify that the minutes contain a clause indicating that the shareholders or board of directors/administrative session, was fulfilled with the simultaneity, interactivity and integrality between the communication of all participants; or to transcribe such facts in the Notary protocol book.
In the case of Associations which are not recorded and transcribed accordingly (so that, the conditions the above paragraph), the notary declaration of public faith shall be replaced by the President and the Secretary of the National Commission for the Defense of Human Rights (CNDH) Partnership. Therefore, if they comply with the stipulations herein, no defect should be recorded. Circular DPJ-010-2018 is hereby rescinded. It is effective as of its publication. In accordance with the above, you must proceed with the established procedure.

You can click on the link below to get the full version in Spanish

 

 

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