1E9Ct5D

etc, business objectives, duration, corporate capital and regulations ruling its internal management(e.g. election, duties and responsibilities of directors, meetings). A shareholder’s extraordinarymeeting must approve subsequent amendments to the bylaws with the same formalities required forthe initial formation.Any unregistered stipulation that detracts from that established by the Civil Code shall not be validwith regard to third parties, whether said stipulations restrict the rights of said third parties or thepowers granted to the administrators.B) CAPITAL STRUCTUREThe Civil Code does not establish a minimum capital amount required to set up a corporation. It onlyrequires that capital be fully subscribed by the shareholders in order to form the corporation.Stock shares may not be issued for less than their stated or nominal value. Capital may be issued asbearer or registered nominative shares and as common or preferred stock, with different voting rights.Shares may be deposited in banks for safekeeping. The banks shall issue a holder certificate for votingpurposes at shareholder’s meeting.Capital may be increased or decreased upon authorization at the shareholder’s meeting. Authorizationfrom the Central Bank of Paraguay is required for banks, finance companies and insurance companies.Shares may be freely transferred, unless a preferential right can be duly proved.If allowed by corporate bylaws, corporations may obtain funding from private or public sourcesthrough the issuance of negotiable debt securities or debentures.C) ADMINISTRATIONOne or more directors, appointed in the annual General Assembly shall undertake the administrationof the corporation. The number and duration of the mandate will be determined by the bylaws.The directors may or may not be shareholders. They can be re-elected and their appointment isrevocable. The appointment of directors shall be made for one fiscal exercise, unless otherwise statedby the provisions in the bylaws.D) RESPONSIBILITY OF THE BOARDDirectors are not responsible for the obligations of the corporation, except in the event of incorrectexecution of duties, or breach of Law or bylaw or any other damage incurred by deceit, abuse ofpowers or serious fault. In such cases, the director’s responsibility before the corporation,shareholders and third parities shall be unlimited. The director that did not participate in the meeting31Berkemeyer Attorneys and Counselors | Asunción - Paraguay