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A) DENOMINATIONThese corporations can adopt any denomination, including the name of one or more partners,followed by the words “Sociedad de Responsabilidad Limitada” or “S.R.L”.B) FORMATION AND CAPITAL STOCKThe legal contract is undertaken in the form of a legal document (deed), which must comply withformalities set forth by the Civil Code. The S.R.L. may operate once the contract has been recorded atthe Public Registry of Commerce. This recordal is not binding, but its omission will hold all partnersjointly and fully liable for any act regarding third parties.Nominative, bearer or endorsable shares cannot represent the capital stock. The capital is divided intonominative shares of a value of Gs. (Guaranies) 1,000 each, or multiples of said amount to be indicatedin the contract.The capital stock must be fully subscribed and at least 50% must be integrated in cash. There is nominimum capital required but this must be sufficient to comply with the proposed objectives of theS.R.L. 50% of capital paid in cash must be deposited at a local bank or the Central Bank. This isrecoverable once the S.R.L. is constituted.Companies dedicated to export or import activities must meet certain requirements assessed by theCentral Bank of Paraguay.The capital stock may also be incorporated by type kind or by fixed assets that shall be transferred tothe corporation in the initial document, or once the contract has been recorded at the Public Registryof Commerce. The partners continue to be liable before third parties for the value of the assets andcapital according to the type incorporated into the company’s capital.C) TRANSFER OF SHARESIf the S.R.L. has more than five partners, then a transfer of shares to third parties will have to beapproved by the partners representing three fourths of the capital. If the number of partners is lessthan five, the approval must be unanimous. The transfer of quotas between partners does not havelimitations.The partner willing to transfer shares must notify other partners of his/her intention, and theremaining partners shall have a 15-day period to reply.Approval is deemed as granted if not expressed otherwise. The partner that did not obtain the consentrequired for the transfer of his/her shares will be unable to resort to court proceedings. If opposition isconsidered unjustified, the other partners will be able to acquire the shares under the same conditionsoffered by the mediator or to the same. The S.R.L. can also acquire shares with the net liquid profits, orBerkemeyer Attorneys and Counselors | Asunción - Paraguay28