1E9Ct5D

An S.R.L. is not dissolved by a partner’s death, interdiction or bankruptcy, nor by theremoval/resignation of the manager or managers or a managing partner appointed in the contract,unless otherwise stated in the contract. Bankruptcy of an S.R.L. does not imply bankruptcy of thepartners.3. CORPORATIONS (SOCIEDAD ANÓNIMA – S.A.)The Civil Code contains provisions ruling the formation of corporations in which the participation ofthe partner is represented by stock shares, and the corporation’s liability before third parties is only tothe extent of capital contribution or assets.The Corporation’s name must contain the description that it is a corporation holding stock by includingthe words “Sociedad Anónima” or the initials “S.A.” in Spanish.Most large enterprises and foreign investors prefer this type of organization. Shares of stocksubstantiate ownership of the corporation; capital ownership is described as shareholders orstockholders and their liability is limited to the amount of their stock.A) FORMATIONThe procedures to form a corporation are as follows:1. A founding shareholders’ meeting is held to approve the corporate by-Acts, appoint directorsand syndics and subscribe the entire corporate capital.2. The bylaws must be notarized by public deed complying with formalities set forth in the CivilCode.3. The Civil and Commercial Court must approve the bylaws.4. The bylaws must be recorded at the Registry of Legal Entities and Associations and at the PublicRegistry of Commerce.5. The bylaws must be published for three days in the Official Gazette and in another newspaper ofbroad circulation.Companies become corporate entities and begin to operate once their inclusion in the Registry ofLegal Entities and Associations has become into effect. Founder shareholders are jointly and severallyresponsible, without limitation, for all acts and business entered into before the legal constitution ofthe corporation and before its recordal at the Public Registry of Commerce.The bylaws must contain the corporation’s name, which must include the words “Sociedad Anónima”(or the abbreviation “S.A.”) and indication of the activity; commercial, industrial, farming, financial,30Berkemeyer Attorneys and Counselors | Asunción - Paraguay