ROLE OF THE STATUTORY AUDITOR (SÍNDICO) IN A CORPORATION IN BOLIVIA

Internal oversight in corporations plays a key role in ensuring transparency and proper management. Within this framework, the síndico serves as a permanent oversight body, monitoring the actions of the board of directors without directly intervening in their decisions. The síndico is appointed by the general shareholders’ meeting to ensure that company operations comply with the law, corporate bylaws, and shareholders’ resolutions. This figure is crucial in balancing the interests of shareholders and preventing abuses of power.

REQUIREMENTS AND APPOINTMENT OF THE STATUTORY AUDITOR

The síndico may or may not be a shareholder and is appointed by the general meeting, which also holds the authority to remove or re-elect the individual. Bolivian law ensures the participation of minority shareholders in this process: those holding at least twenty percent of the company’s capital stock have the right to appoint a director as well as a statutory auditor, promoting plurality and balance in internal oversight.

To serve in this role, one must be legally capable of conducting commercial acts and reside in the same location as the company’s registered office. However, certain individuals are explicitly barred from acting as síndicos: directors, managers, employees of the company, as well as the spouses and close relatives of those holding such positions.

KEY FUNCTIONS OF THE STATUTORY AUDITOR IN CORPORATIONS

The position of síndico is personal and non-delegable. Their primary duties include:

• Supervising the company’s administration without interfering in managerial decisions.
• Participating in board and general meetings with the right to speak but not vote.
• Reviewing accounting books, financial statements, and requesting trial balances.
• Ensuring that directors comply with the legal requirement of posting a surety bond before assuming office, as a form of liability guarantee.
• Reporting any irregularities to the general meeting and proposing corrective actions.
• Issuing a written opinion on the balance sheet, income statement, and annual report.
• Calling extraordinary shareholders’ meetings when necessary or when the board fails to do so.
• Overseeing the company’s liquidation process and addressing formal complaints from shareholders.
• Ensuring the board operates in accordance with the bylaws regarding the number of members, term durations, meeting frequency, quorum, and decision-making majorities.

For example, if a síndico identifies discrepancies in the financial statements, they are obligated to inform the general meeting and demand corrections, thereby protecting all shareholders.

STATUTORY AUDITOR’S OVERSIGHT OF THE BOARD OF DIRECTORS

The síndico’s role goes beyond document review — it also involves monitoring directors’ actions. According to applicable regulations, directors must remain in office until their replacements are appointed. They may be removed by the general meeting if a liability process is initiated, and any resignation must be submitted to the board, which may accept or reject it until the next general meeting. The síndico ensures that these processes are carried out lawfully, safeguarding administrative continuity and corporate interests.

Furthermore, if a director or manager becomes legally disqualified, the síndico has the authority to call a meeting to initiate their removal. This reinforces their role as an active counterbalance to the board and a protector of the corporation against potential misconduct.

LEGAL LIABILITY OF STATUTORY AUDITORS

Statutory auditors are jointly and severally liable for any breach of their duties, both to the company and to third parties. They may also be held responsible alongside directors for their acts or omissions, even if no actual damage occurred. This underscores the importance of the síndico as a guarantor of legality and transparency within the corporation.

In summary, the síndico plays a fundamental role in protecting shareholders and ensuring sound corporate governance. Their duties include surveillance, reporting, and enforcement of compliance. They are directly involved in monitoring the board’s functionality, including meeting validity, surety compliance, director tenure, and the removal of those who breach the law.