BUSINESS MERGERS IN BOLIVIA

Author: LLM. Rigoberto Paredes Ayllón

A business merger is a legal mechanism that allows two or more companies to combine in order to strengthen their market position, optimize resources, or expand operations. This process, regulated under commercial law, involves the transfer of rights and obligations, as well as a corporate restructuring that may affect both partners and creditors. Understanding the legal steps and implications of a merger is essential to avoid conflicts and ensure regulatory compliance.

CORPORATE MERGERS IN BOLIVIA: KEY LEGAL STEPS

Legally, a merger occurs when several companies dissolve without liquidation to form a new entity, or when one company absorbs others that are likewise dissolved without liquidation. In both cases, the resulting company—whether new or the absorbing entity—fully assumes the assets, rights, and obligations of the entities that cease to exist.

For example, if a food distribution company merges with a transportation firm to create a new logistics corporation, both entities will cease to exist individually, and all their assets and liabilities will be transferred to the new entity.

PRELIMINARY REQUIREMENTS FOR BUSINESS MERGERS IN BOLIVIA

Before the merger is formalized, the participating companies must sign a merger commitment. This agreement must be approved by the majority usually required for amending each company’s bylaws. Following this decision, each company must prepare a special balance sheet with an updated date, which must be made available to partners and creditors.

Creditors may oppose the merger if they believe their rights are not adequately protected. In the event of a dispute regarding these guarantees, a judge will resolve the matter through a summary proceeding.

MERGER AGREEMENT IN BOLIVIA: KEY ELEMENTS

Once the preliminary requirements are met, the companies must sign a definitive merger agreement that includes:

The resolutions approving the merger from each company.
A list of partners exercising their right to withdraw and the amount of capital involved.
Identification of opposing creditors and the value of their claims.
Detailed clauses for executing the agreement, specifying how the dissolved partners’ shares will be handled.
The previously prepared special balance sheets.

This document serves as the legal foundation for the transfer of assets and the corporate transformation of the merging companies.

FORMATION OF THE NEW COMPANY OR AMENDMENT OF BYLAWS

If the merger results in the creation of a new company, it must be established in accordance with the adopted corporate type and fulfill all formal requirements. In the case of a merger by absorption, the absorbing company must amend its bylaws to reflect the structural and capital changes resulting from the merger.

Example: If a tech company absorbs a graphic design firm, it must amend its bylaws to incorporate new business lines and the inclusion of new partners, if applicable.

PUBLICATION AND REGISTRATION IN THE COMMERCIAL REGISTRY

The definitive agreement must be registered with the Commercial Registry and published as required by current regulations. This ensures its enforceability against third parties and formal validity. Publication guarantees transparency in the process and protects the interests of partners, creditors, and other stakeholders.

Mergers in the Plurinational State of Bolivia represent a legitimate and effective strategy for business consolidation. However, the process demands strict compliance with both procedural and substantive legal stages. From preparing balance sheets to final registration, each step carries legal responsibilities and may result in significant financial, administrative, and contractual consequences.

Our law firm has extensive experience in corporate merger processes. If you require specialized legal advice, please contact us for trustworthy and personalized legal assistance.

Frequently Asked Questions (FAQs)

What happens to the contracts of the merging companies?

All active contracts are automatically transferred to the new or absorbing company without the need for new agreements.

Can partners oppose the merger?

Yes. Partners have the right to withdraw from the company if they disagree with the merger and are entitled to receive the value of their participation.

What if creditors oppose the merger?

They may demand appropriate guarantees before the merger is executed. If not adequately secured, they may seek judicial protection of their rights.

Can a merger be revoked before completion?

Yes, as long as the definitive agreement has not been signed and no harm has been caused to the partners, third parties, or involved companies.

What responsibilities do administrators have during the merger?

They act as representatives of the dissolved companies and assume the same duties as liquidators, in addition to their regular responsibilities.

Bibliography

Political Constitution of the Plurinational State of Bolivia.
Bolivian Commercial Code.
Regulations of the General Directorate of the Commercial Registry and Joint-Stock Companies.
Plurinational Legislative Assembly. (n.d.). Commercial Code of the Plurinational State of Bolivia. La Paz

The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.