ISSUANCE, TRANSFER, AND REGULATION OF SHARES IN CORPORATIONS (S.A.) IN BOLIVIA

NOMINAL VALUE OF SHARES IN BOLIVIAN CORPORATIONS

Shares divide the share capital into equal nominal values, set at 100 Bolivian pesos or multiples of one hundred. This uniformity ensures equality within each series and facilitates clear accounting of corporate assets.

PROHIBITION ON ISSUING SHARES BELOW PAR VALUE IN BOLIVIA

Issuing shares below their nominal value (under par) is prohibited. An issuance premium may be authorized by the extraordinary shareholders’ meeting, and it must be uniform within each issuance. The premium amount, minus placement expenses, constitutes a special reserve that cannot be distributed as an ordinary dividend and is intended to strengthen net equity.

ISSUANCE OF SHARE CERTIFICATES AND PROVISIONAL CERTIFICATES

Share certificates may represent one or more shares and can be registered (nominative) or bearer.

PROVISIONAL CERTIFICATES: VALIDITY AND CONVERSION

If shares are not fully paid, only nominative provisional certificates may be issued; any provisional bearer certificate is void. Once the full value is paid, the holder can demand the definitive certificate. If the company fails to deliver the definitive certificate within a reasonable period, the provisional certificate is deemed definitive and becomes negotiable.

BEARER CERTIFICATES: FULL PAYMENT REQUIREMENT

Bearer share certificates can only be issued when their value has been fully paid. This prevents anonymous circulation of shares with outstanding contributions.

INDIVISIBILITY AND CO-OWNERSHIP: UNIFIED REPRESENTATION

Shares are indivisible for the company. In the case of co-ownership, the company recognizes a single representative to exercise rights and fulfill obligations. If no agreement exists, a judge will appoint one, applying civil co-ownership rules. Example: siblings inheriting shares must appoint one person to vote and receive corporate notices.

CONSEQUENCES OF DEFAULT ON SHARE PAYMENTS

When subscription agreements or bylaws set payment deadlines and amounts that are not met, the shareholder falls into default.

LEGAL ACTIONS AND SALE OF DEFAULTED SHARES

The company may initiate enforcement proceedings for payment, sell the defaulting shareholder’s shares, or apply other statutory mechanisms (e.g., offsetting against liquid credits owed to the company).

SUSPENSION OF RIGHTS AND COSTS CHARGED

Default automatically suspends the shareholder’s rights (voting and dividends). The defaulting subscriber bears legal costs, auction or sale expenses, and default interest, in addition to liability for damages.

CAPITAL REDUCTION, CANCELLATION, OR PARTIAL RELEASE

If, within thirty days of default, enforcement is not initiated or the shares cannot be sold, the rights of the defaulting shareholder are extinguished or suspended as applicable. The company must either:

• Reduce share capital and return any balance after deducting expenses; or
• Reduce the unpaid portion and deliver fully paid shares for the amount actually covered.

LEGAL REQUIREMENTS FOR SHARE CERTIFICATES

Share certificates and provisional certificates (detached from booklets) must include at least:

1. Shareholder’s name (if nominative).
2. Company name, domicile, date and place of incorporation, and duration.
3. Registration date in the Commercial Registry.
4. Amount of share capital and authorized capital.
5. Nominal value per share; series (common or preferred), total number of shares in the series, and rights attached.
6. Number of shares represented by the certificate.
7. Place and date of issuance and sequential number.
8. For provisional certificates, notation of payments made.
9. Signatures of at least two directors or administrators and the statutory auditor.

Signatories are jointly liable for essential omissions or violations of law/bylaws, as well as for damages to legitimate holders.

DIVIDEND COUPONS AND THEIR CIRCULATION

Certificates may include attached coupons for dividend collection. Coupons can be bearer even if the share is nominative, facilitating circulation and payment.

SHARE REGISTER BOOK: CONTENT AND EFFECTS

Corporations must maintain a share register book, with accounting book formalities, open for shareholder consultation. It must record:

1. Name, nationality, and domicile of the shareholder.
2. Number, series, class, and other details of the shares.
3. Subscriber’s name and payment status.
4. For bearer shares, their numbers; for nominative shares, transfer details with dates and names of acquirers.
5. Liens or encumbrances on shares (pledges, seizures, etc.).
6. Conversions of certificates with details of new ones.
7. Any other mention arising from the legal status of the shares and changes thereto.

CONSTITUTIVE REGISTRATION OF OWNERSHIP

The company recognizes as owner of nominative shares whoever appears both on the certificate and in the register. An unjustified refusal to register an acquirer makes the company and its administrators jointly liable for damages.

TRANSFER OF SHARES

Transfers are generally free. However, the articles of incorporation may impose conditions on transferring nominative shares, provided they do not constitute a prohibition; such conditions must appear on the certificate.

TRANSFER WITH OUTSTANDING BALANCES: LIABILITY OF THE TRANSFEROR

If the transferor has not fully paid for the shares, they remain jointly liable for payments owed by successive transferees. If the transferor subsequently makes any payment, they become co-owner in proportion to the amount paid.

NOMINATIVE SHARES: ENDORSEMENT AND REGISTRATION

The transfer of nominative shares is perfected through endorsement and becomes effective against the company and third parties upon registration in the share register.

BEARER SHARES: DELIVERY

The transfer of bearer shares is perfected by simple delivery (tradition) of the certificate.

PREEMPTIVE RIGHTS AND NEW SHARE ISSUANCES

Shareholders have a preemptive right to subscribe to new shares in proportion to their existing holdings. The company must publish the subscription offer in the Electronic Gazette of the Commercial Registry. This right must be exercised within thirty (30) days of publication, unless a longer term is set in the bylaws. No new issuance can be made until the previous one is fully subscribed.

PROHIBITED TRANSACTIONS WITH OWN SHARES

ACQUISITION OF OWN SHARES THROUGH JUDICIAL AWARD

The company may not acquire its own shares except through judicial adjudication in payment of debts owed to it. These shares must be sold within 90 days of adjudication; if not possible, the capital must be reduced and the shares become void. While held by the company, they cannot be represented in shareholders’ meetings.

LOANS AND GUARANTEES WITH OWN SHARES: ABSOLUTE PROHIBITION

Under no circumstances may the company grant loans, advances, or operations secured by its own shares.

LIABILITY OF DIRECTORS

Directors or administrators are personally and jointly liable for damages caused to the company or third parties by violations of the above two prohibitions.

APPLICATION OF SECURITIES LAW TO SHARES

In matters not expressly regulated, the provisions of the securities regime apply to shares, insofar as they are compatible with corporate law. This affects issues such as holder legitimization, circulation, good faith, and enforceability.

In summary, the legal regime governing shares in Bolivian corporations establishes rules on nominal value, issuance, registration, transfer, preemptive rights, and prohibitions to ensure capital solvency and transparency in the circulation of ownership interests. Compliance prevents disputes, protects investors, and strengthens corporate governance.