WHO IS CONSIDERED A SHAREHOLDER?
MAIN SHAREHOLDER RIGHTS IN BOLIVIA
PARTICIPATION IN CORPORATE DECISIONS
Shareholders have the right to attend general meetings and vote. This is not merely symbolic—voting influences critical decisions such as the appointment of directors, approval of financial statements, and amendments to bylaws. Shareholders may also serve on management and internal oversight bodies, enhancing their ability to supervise corporate operations.
ACCESS TO ECONOMIC BENEFITS
A shareholder is entitled to receive dividends when the company generates profits. Distribution is proportional to the amount actually paid for the shares. Once dividends are approved in a general meeting, shareholders acquire a legally enforceable credit right, typically paid in cash unless otherwise agreed.
In the event of liquidation, shareholders are also entitled to receive a portion of the remaining assets, again proportional to the paid-in value of their shares.
PROTECTION AND EQUAL TREATMENT
The corporation is obligated to ensure equal treatment for shareholders of the same class. Shareholders also have the right to challenge decisions made by the board or general meeting, although this right is not available to those who owe outstanding debts to the company that are properly documented.
The free transfer of shares is also guaranteed. However, the corporate bylaws may impose specific conditions on the transfer of nominative shares, as long as these do not constitute a restriction on the right to transfer. Such limitations must be explicitly stated on the corresponding share certificate.
LIMITATIONS AND REGULATIONS ON VOTING RIGHTS
The right to vote may be subject to certain limitations. For instance, the bylaws may restrict voting rights attached to preferred shares, but never in extraordinary matters such as mergers, transformations, or bylaw amendments. Additionally, directors and auditors are prohibited from voting on matters concerning their own management or liability, to avoid conflicts of interest.
No provision in the bylaws may arbitrarily limit the freedom of shareholders to vote, except as allowed for preferred shares.
REPRESENTATION AND SHAREHOLDER RIGHTS IN SPECIAL CASES
Shareholders may be represented at meetings by third parties, provided that these representatives are not part of the company’s management or administrative staff. When shares are pledged, under usufruct, or subject to seizure, the voting rights remain with the legal owner, thereby preserving their participation despite such encumbrances.
If a resolution could affect the rights of a specific class of shares, an additional special meeting composed exclusively of that class must be held for approval. This mechanism serves as a safeguard against unilateral decisions that may be detrimental to certain shareholders.
INALIENABILITY OF LEGAL SHAREHOLDER RIGHTS
In conclusion, shareholder rights established by law cannot be overridden by corporate bylaws or the articles of incorporation. This legal guarantee protects investors against potential abuses or restrictions imposed by the company’s own governing bodies.
If you are a shareholder seeking to assert your rights or facing challenges within a corporation, our law firm offers specialized legal advice in corporate law. Contact us today to protect your interests.
Frequently Asked Questions (FAQs)
How can I know if I am officially recognized as a shareholder?
It depends on the type of share. For nominative shares, you must be registered in the company’s shareholder registry. For bearer shares, simply holding the share certificate is enough.
What should I do if the company doesn’t pay approved dividends?
Once the dividend distribution is approved by the shareholders’ meeting, you acquire a credit right that can be legally enforced.
Can I freely transfer my shares?
Yes, unless there are specific restrictions set out in the bylaws or applicable law.
Do I have the right to challenge decisions I disagree with?
Yes, but not if you owe documented debts to the company.
Can a director represent me at a shareholders’ meeting?
No. Directors, auditors, and employees of the company cannot act as proxies for shareholders in meetings.
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.
