Key Benefits:
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DECREE No. 553.-
THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR,
CONSIDERING:
I.-That Article 113 of the Constitution of the Republic encourages and protects economic associations that tend to to increase national wealth through better use of the natural and human resources, and to promote a fair distribution of the benefits of such activities;
II.-Article 115 of the Constitution of the Republic declares trade, industry and the provision of services in small as heritage of Salvadorans by birth and natural Central Americans;
III.-That the importance of micro, small and medium enterprise in the economic development of the country for its contribution to the generation of employment labor and the elimination of poverty;
IV.-That the deep social interest of the State to improve the competitive capacity of micro, small and medium-sized enterprises and the facilitation of access to credit to them by means of guarantees;
V.-That the need for a Guaranty System through the establishment of Guarantee companies fulfill the objective of guaranteeing the obligations efficiently and, in addition, that allows the associations and entrepreneurs the associativity and business development through the participation of the micro, small and medium entrepreneurs in these societies;
BY TANTO,
in use of their constitutional and initiative faculties of the President of the Republic, through the Minister of Economy and Deputies Francisco Roberto Lorenzana Duran, Mauricio López Parker, Carlos Walter Guzmán Coto, Juan Duch Martínez, Medardo González Trejo, Francisco Alberto Jovel Urquilla, Noe Orlando Gonzalez, Jorge Alberto Villacorta Munoz, Norman Noel Quijano Gonzalez, Julio Antonio Gamero Quintanilla, Alfonso Aristides Alvarenga, William Rizziery Pichinte, Ruben Orellana Mendoza, Agustin Diaz Saravia, Manuel de Jesus Rivas, Guillermo Perez Zarco, Mariela Peña Pinto, Manuel Oscar Aparicio, Elmer Charlaix, Dumercy Juarez, Juan Miguel Bolanos, Francisco Flores, Francisco Guerrero, Carlos Castaneda Magana, Roberto Jose D' Aubuisson Munguía, Walter Eduardo Duran Martinez, Jorge Antonio Escobar, Hermes Alcides Flores Molina, Nelson Funes, Guillermo Antonio Gallegos Navarrete, Alba Teresa de Duenas, Gustavo Chiquillo, Rene Oswaldo Maldonado, Jorge Alberto Munoz, Osmin Lopez Escalante, José Ascención Marinero Cáceres, Carlos Centi, Silvia Cartagena, José Manuel Melgar Henriquez, Oscar Mancia, Cristobal Barrera, Miguel Angel Navarrete Navarrete, Renato Antonio Pérez, Mario Antonio Ponce López, José María Portillo, Margarita Guillen, Jose Mauricio Quinteros, Carlos Armando Reyes, Zoila Quijada, Miguel Ayala, Alfredo Arbizu, Salvador Sanchez Cerén, Wilber Ernesto Serrano Calles, David Humberto Trejo, Donato Eugenio Vaquerano Rivas, Fabio Balmore Villalobos Membeno, Olga Ortiz Murillo, Vicente Menjivar, Carlos Mauricio Arias, and Alberto Romero,
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DECRETA, the following:
RECIPROCAL GUARANTEE SYSTEM LAW FOR MICRO, SMALL AND MEDIUM RURAL AND URBAN ENTERPRISE
PRELIMINARY GENERAL PROVISIONS
OBJECT AND SCOPE
ART. 1. -The purpose of this Law is to regulate the System of Reciprocal Guarantee Societies and their operations, in order to facilitate the access of the micro, small and medium enterprises to the financing and to public or private procurement and procurement.
The System of Reciprocal Guarantee Societies is made up of the Reciprocal Guarantee Societies, which will henceforth be called "Guarantee Societies", the Reciprocal Guarantee Societies, hereinafter referred to as "the Guarantee Companies". "Reafiranzadoras" and the Trust for the Development of the Reciprocal Guarantees System henceforth called the "Trust". The Mutual Guarantee Corporation System will be referred to as the "System".
It will be understood by micro, small and medium enterprise, as defined by the Ministry of Economy through the National Commission of Micro and Small Enterprises, CONAMYPE, or the institution that this delegate.
In the text of this Law, the Central Reserve Bank of El Salvador will be called: "The Central Bank," and the Superintendence of the Financial System will be called "The Superintendence," the Multisectoral Bank of Investments will be called the "BMI".
Law Enforcement
Art. 2. In the absence of this Law, laws of a commercial and financial nature shall apply.
Validity of Guarantees
Art. 3.-For the purposes of the Public Administration Procurement and Contract Law, the guarantees granted by the System will be considered valid.
Taxation
Art. 4. -The Superintendence will supervise the institutions that make up the System, as well as the compliance with the laws, regulations and regulations that apply to it.
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CHAPTER I MUTUAL GUARANTEE SOCIETIES
Legal Nature
Art. 5.-The Guarantee Companies will be constituted in the form of Limited Societies and will be governed by the provisions of the same with the particularities and exceptions that this Law has.
Exclusive Purpose
Art. 6. -The Guarantee Companies will be constituted for the exclusive purpose of granting in favor of their Partners, guarantees, bonds and other financial guarantees approved by the Superintendence, called in this Law "guarantees". The Guarantee Companies will also be able to provide their partners, training, consulting, financial advisory and related services, to the micro, small and medium enterprises.
Denomination
Art. 7. -Guarantee companies may adopt and register any trade name or denomination which they believe to be appropriate so that they do not belong to another entity and do not give rise to confusion. The indication "Guarantee Company" or its abbreviation S.G.R., which is exclusive to this type of company, must necessarily be included.
No Guarantee Company shall use in its name or trade name the expression "National" or any another that may suggest that this is an organization by which the State responds.
The Trade Registry shall not register those Guarantee Companies whose denomination or trade name is opposed to the provisions of this Article.
Partners
Art. 8. -The partners of the Guarantee Companies will be of two types, Partners Participates and Partners Protectors.
They are Partners Participates natural or legal persons belonging to the micro, small and medium enterprise and who participate in the capital of a Guarantee Company. These partners may apply for the services of the Guarantee Companies and make use of the products that it provides.
Protective Partners are natural or legal persons, foreign, public or private, who are participate in the social capital of a Guarantee Company. These partners will not be able to request the services of the Guarantee Company or make use of the products it provides.
Minimum of Partners
Art. 9.-The Guarantee Companies shall be constituted with not less than one hundred members and at least one protective partner.
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Financial Institutions as Protective Partners
Art. 10.-When the Financial Institutions regulated by the Superintendency are Protective Partners in a Guarantee Company, such participation shall not count as part of the financial conglomerate or related companies thereof, provided that the participation in a Guarantee Company is equal to or less than 50% of the share capital of the Guarantee Company and there is at least one additional protective partner not economically linked to the financial institution in the Guarantee Company.
Capital, Variability, and Social Participations
Art. 11.-The social capital shall be integrated by the contributions of the members and shall be variable between a fixed minimum amount, determined in the statutes of each company, and up to three times that amount. It shall be divided into social units of equal nominal, cumulative and indivisible value, which shall not be negotiable and shall not be called shares. The value of the social units shall be determined in the social statutes of the Guarantee Company.
Within the limits established for the variation of the capital, and respecting the minimum solvency requirements, the latter may be increase or decrease by means of new social participation or by the repayment and extinction of existing ones by agreement of the Extraordinary General Meeting.
The variation of capital outside the established limits will require the modification of the minimum amount fixed in the statutes and this variation must be at least equal to the paid capital
The Protection Partners and Partner Partners will have limited liability.
Social Participations as part of the Capital
Art. 12. Only social contributions may be subscribed to in cash and shall not be eligible for social participation by a figure below their nominal value. All social interests will attribute the same rights to their holders depending on whether they are participants or protectors.
Increase of the Capital Minimum Month
Art. 13.-The capital increases of a Guarantee Company shall be carried out in accordance with Article 11, the minimum social capital must be increased when the minimum in force has tripled its amount. Capital Minimum Month Reduction
Art. 14.-Any reduction in capital must be notified, within a period of no more than five working days, after an agreed upon the financial and creditor entities of the Participating Partners in favor of which the company has provided guarantee. These entities, as well as the remaining creditors of the company, may object in accordance with the procedures laid down in the supplementary laws.
Similarly, the agreement to reduce the amount of social capital to an amount will be void. less than that set out in Article 55 of this Law.
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The effects of nullity will be governed by the provisions of the Civil Code.
Capital Increase or Reduction Procedure
Art. 15.-Any agreement to increase and reduce the minimum amount of capital must be taken in the Extraordinary General Meeting of Partners by a qualified majority and published once in the Official Journal and twice in two national circulation newspapers.
Essential Rights That Attributes Social Participation
Art. 16.-The holder of a social participation has the status of a partner and corresponds to at least the following rights:
a) Voting in the General and Extraordinary General Boards, as well as challenging the social agreements;
b) Request the reimbursement of the social participation;
c) Participate, if any, in the social benefits established in the statutes of the company;
d) Receive information in accordance with the provisions of the Companies Anonymous in the Trade Code, with a general character for the partners; and
e) Participate in the equity resulting from the settlement.
Additional Rights for Partner Partners
Art. 17.-The Partners involved have, in addition to the rights indicated in the previous article, the right to request guarantees, training, consulting, financial advice and related services of the company, within the limits and conditions established in the Social Statutes of the Guarantee Company.
Voting Law
Art. 18.-Each participation confers the right to one vote, but no single partner will be able to have a number of votes greater than 5% of the total or a lower limit than the above percentage, which will be set by the statutes.
The statutes may provide that each of the Protective Partners may have up to a number of votes equal to 50% of the total, but in no case shall the votes for the set of Protective Partners exceed that ratio. If necessary, the number of votes that correspond to each of them will be reduced proportionally, without being able to deprive them of at least one vote.
Partner and Guarantees Records Granted
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Art. 19. The members shall be registered, with the expression of the number of shares in which they are holders and of the successive disbursements made by reason of the same, in a special register which, duly legalized, must be carried out by the company. It shall express the name, name, reason or social name and address of the partner, its partner character or a protective partner, and where applicable, the company whose ownership it holds.
In another register, also legalized, the name of the company company, the guarantees granted by it to the partners, with mention of the amount, characteristics and time of the guaranteed debt and their guarantee, as well as the dates of granting and extinction of the same.
Transfer of the Participations
Art. 20. The transfer of the social units shall always require the prior authorization of the Board of Directors, who shall verify that the acquirers comply with the legal requirements or the statutes. Any acquirer may not exercise the rights that correspond to him as a partner if he does not comply with the above requirement.
The units whose ownership is required by the statutes for obtaining a guarantee granted by the company, will only be transferable after the extinction of the guaranteed commitment as long as it has not been honored by the Guarantee Company.
From the Transmission of Death Cause Participations
Art. 21.-In cases of transmission of the units for the cause of death, the heir or legatary shall acquire the status of a member, after agreement of the Board of Directors at the request of the latter.
If the application is not approved by the Board Directive, in the same act, it will have to agree to the reimbursement to the heir or legatary of the social participations, once they have been extinguished, if any, the debts that the society has guaranteed from those participations. Capital Cash Liability Obligation
Art. 22.-At the time of the subscription of the social units the members must pay in cash, the nominal value of the social participations that they subscribe.
Obligation to Carry on Cash the Capital against the Guarantee of Guarantees
Art. 23.-The Partner shall contribute in cash to the company the portion of capital corresponding to a percentage of the value of the guarantees granted to it, these contributions shall be regulated in the statutes or, failing that, by agreement of the General Board.
Right to the Reimbursement of Social Participations
Art. 24. The partner may require the reimbursement of the social interests belonging to him and whose ownership is not required by the statutes on the basis of an existing guarantee granted by the company.
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The refund must be requested at least three months before the end of the respective year, unless the statutes have a longer term, which may not exceed one year.
The amount of the refund will be the lowest value between the book value of the shares provided and the nominal value. The reserves and surpluses belong to the company and on them no partner has rights, nor will it be able to request their refund.
Social participations Affects a Guaranteed and Non-extinguished Guarantee
Art. 25.-The Guarantee Company shall have regard to the ranking of claims, the preference recognized in Article 2217 of the Civil Code, on the social interests affected by a guarantee granted by that guarantee, while that guarantee is maintained.
The preference referred to in the foregoing paragraph shall not affect the rights that the creditor may exercise over other interests not affected by existing guarantees.
Of Co-ownership and the Royal Rights Over the Shareholdings
Art. 26. The co-ownership and usufruct of the units shall be governed by the provisions of Articles 130 and 132 of the Trade Code.
Effects of the Exclusion of a Partner
Art. 27.-The exclusion of a partner shall have the following effects:
(a) The General Meeting agreement whereby a member is excluded from the company shall deprive the partner of his status as such and shall grant him the right to repay the shares
b) Notwithstanding the provisions of the foregoing paragraph, where the Board of Directors agrees to the exclusion of a partner for having failed to fulfil the obligations laid down in the Directive, the amount paid by the company is unlikely to be recovered and the amount paid by the company is unlikely, shares of the excluded partner shall be used to cover the payment made by the company under the guarantee;
(c) If the amount of the refund exceeds the amount paid by the company, the excess shall be allocated, if appropriate, to a reserves to cover other guarantees granted in favour of the same partner remaining in force; and
d) In any event, both the amount of the redemption of the shares and the liability of the partner excluded for that amount, in relation to the debts incurred by the company prior to the date of repayment shall be governed by the provisions of for separation in Article 24 of this Law.
Utilities Delivery
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Art. 28. -They can only be distributed among the partners, really perceived utilities, and the voluntary reserves, provided that the value of the total asset minus the liabilities payable is not less than the share capital.
where appropriate, in accordance with the limits set out in this Law and in particular the minimum solvency requirements.
When the company obtains dividends, these may be accumulated in the form of contributions which shall also be to cover the minimum amount of contributions that are required to qualify for the guarantees.
Technical Provisions Fund
Art. 29.-Any Guarantee Company shall constitute a Technical Provisions Fund, which shall form part of its assets and shall be intended to strengthen the solvency of the company.
Its minimum amount shall be 1% of the current risk portfolio, amount to be reviewed and adjusted by the Superintendence in accordance with the technical standards it is issuing.
The Technical Provisions Fund may in any case be integrated by:
a) The amount that the Guarantee Company For the purposes of this Annex, the following shall be reported: insolvencies; The Superintendence will dictate the corresponding technical standards for the calculation of the Fund's provisions supporting the risks of operations carried out by the Company of Guarantees;
b) Grants, donations or Other non-reintegrable contributions to the Guarantee Company are made to it; and
c) Any other contributions that the regulations or statutes determine.
Legal Reserve
Art. 30. The Guarantee Company shall reserve at least 50% of the profits it obtains in each financial year, after tax, until it constitutes a legal reserve fund that reaches a value equal to three times the minimum amount of social capital.
At no time will the Guarantee Companies capitalize on the legal reserve. From this reserve fund you may only be able to cover losses as provided for in Article 57 of this Law.
Limitations to the Delivery of Utilities
Art. 31.-Once the respective reserves have been incorporated in accordance with the provisions of the statutes, and by agreement of the General Board, utilities may be distributed to the partners in proportion to the capital they have contributed.
Authorization to Constitute a Guarantee Society
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Art. 32.-To constitute a Society of Guarantees, the interested parties must submit to the Superintendence their application accompanied by the following information:
a) Draft Constitution in which the social statutes will be incorporated;
b) The organization and administration scheme of the company;
c) The financial bases of the operations it plans to develop;
d) The programme of activities, in which it will specify in a specific way the operations that are project to perform;
e) Requirements of the partners to constitute the company, with indication of their equity holdings;
f) Listing of the founding partners including the amount of their respective subscriptions and their generals, which will be certified by an External Auditors firm; and
g) (b) General managers, indicating the experience of the latter, with detailed information on their business activity, as well as the information necessary to verify that the skills defined in Article 47 are not met.
The Superintendence will also be able to require the interested parties within thirty days from the date of submission of the application, extension of the information referred to in this Article.
The application for authorisation shall be resolved within sixty calendar days following receipt of the request. all documentation required by the Superintendence, otherwise it will be approved.
The authorization may only be refused, by reasoned resolution, when the projected Guarantee Company does not conform to the provisions of the (a) this law, or does not provide sufficient guarantees for adequate compliance with its social object.
From Revocation
Art. 33.-The Superintendence may revoke the authorization, in the following cases:
a) For very serious infractions, in accordance with the provisions of the Law of the Superintendence;
b) When the company has not initiated its activities that have elapsed one year since the date of their authorisation;
c) At the request of the company itself; and
d) Insolvency not remedied within the deadline set by the Superintendency.
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Constitution and Legal Personality
Art. 34.-The testimony of the writing of the constitution must be presented to the Superintendence to qualify if the terms stipulated in the social statutes are in conformity with the previously authorized projects and if the social capital has been effectively integrated according to the authorization.
The Legal Personality of the Company is perfected and is extinguished, as the case may be, by the registration in the Register of Commerce of the respective writing.
registration in the Register of Commerce the constitutive writing of a Society of Guarantee, without that carries a reason subscribed from the Superintendence in which the favorable rating of that writing is recorded.
Start of Operations
Art. 35.-The requirements laid down in this Law, verified their internal controls and procedures and registered the social writing in the Register of Commerce, the Superintendence will certify that said Society of Guarantee is authorized to start their operations.
The certification shall contain the name of the Guarantee Company, the data relating to the granting and registration of its social writing, the amount of the minimum social capital paid and the names of its directors and administrators. This certification will be published, on behalf of the Guarantee Society, for one time, in the Official Journal and in two national circulation journals.
CHAPTER II ADMINISTRATION
Management Bodies
Art. 36.-The Governing Bodies of the Guarantee Society are the General Board and the Board of Directors.
Competition of the Ordinary General Meeting
Art. 37.-The Ordinary General Meeting shall meet at least once a year and shall decide on the matters attributed to it by the legal provisions or by the social statutes, and in particular on the following:
a. Board of Directors and Audit Committee, as well as the determination of their number when the statutes establish only the maximum and the minimum and set their remuneration;
b) Revoke the appointment of the members of the Board of Directors in necessary case;
c) Approve the annual financial statements, duly audited, and distribution of
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utilities as appropriate;
d) Approve the Annual Report of Labors;
e) Set the maximum limit of the obligations to be guaranteed by the company during each financial year;
f) Establish the proportion of capital that the Partners Unit-holders must contribute to the value of the guarantees to be granted by the Company Warranty;
g) Name the Owner and Substitute External Auditor and set their remuneration;
h) Exclude a partner from any of the causes set forth in this Act or in the statutes; and
i) This Law or the statutes.
To know and decide on the matters covered by literals (b), (c) (d), (e), (f), and (g) the General Meeting shall necessarily meet within the first two months of each financial year. In the absence of agreement on the literal e) the same limit as previously governed will be understood.
Competition of the Extraordinary General Meeting
Art. 38.-The Extraordinary General Meeting shall meet in particular for the following matters:
a) Approval or modification of the statutes of the company;
b) Increase or decrease in the minimum amount of the share capital shown in the statutes;
c) Merger, dissolution and settlement of the company;
d) Designation of special executors, in cases where modification of the social pact is required or established by this Law; and
e) Appointment of representatives special in the case of Dissolution and Forcible Settlement.
The call to the General Meeting Extraordinary, shall be concluded by agreement of the Board of Directors or at the request of a number of partners not less than 5% of the total or representing at least 10% of the social capital paid.
The application must be expressed matters to be dealt with by the Board, which shall be convened to be held within 30 days of the date on which the administrators were required in writing to convene the Board. The Board of Directors will work out the agenda, including necessarily the issues that would have been the subject of an application.
Convocation, quorum and resolutions
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Art. 39.-The formalities of the convocation of Ordinary and Extraordinary General Meeting as well as the quorum of attendance and the proportion of votes necessary to form a resolution shall be governed by the provisions laid down for the companies anonymous in the Commercial Code; without prejudice to the provisions of Article 18 of this Law.
Representation on the General Meeting
Art. 40.-Except as otherwise provided in the social statutes of the Guarantee Company, any partner may be represented on the General Meeting by another partner.
No one may have more than ten representations, or a number of votes delegates more than 10% of the total. The representation must be granted in writing and in a special manner for each Board.
No person may have the representation of Partner Partners and Protective Partners at the same time.
Restrictions on the Exercise of Law Vote
Art. 41.-The exercise of the right to vote shall not be valid for the adoption of a decision to release from an obligation to the person who exercised it or to decide on the possibility of the company asserting certain rights against him.
members who, in accordance with this provision, cannot exercise the right to vote shall be counted only to establish the quorum of attendance at the Board, but not for the computation of the majority for the adoption of the agreement.
the withdrawal of the members who have interests within the resolutions of the society, under penalty
Failure to comply with these provisions will disable the partner to opt for managerial positions within the Guaranty System.
Modification of Statutes
Art. 42.-The modification of the statutes must be agreed by the Extraordinary General Meeting and must comply with the following requirements:
a) That the administrators or, if any, the partners responsible for the proposed modification, elaborate a report written with the justification of the report;
b) To be expressed in the call, with due clarity, the clauses to be modified;
c) That the notice of the call shall include the right to it is up to all the partners to examine in the company's registered office the full text of the the proposed amendment and the report on it and to ask for the free delivery or delivery of such documents; and
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d) That the agreement be adopted by the Board in accordance with the provisions of this Law.
Such modification will require the authorization of the Superintendence that will resolve within the maximum period of ninety calendar days following its presentation. In the event of observations, the Guarantee or Reafianzadoras companies must remedy the same by having the Superintendence to receive them in accordance with the same and give their opinion within a maximum period of twenty-one days from the date of receipt. of the information. The authorization shall be granted, the agreement shall be entered in public deed, entered in the Register of Commerce and shall be published, on behalf of the Guarantee Company, for one time, in the Official Journal and in two circulation newspapers. national.
The modification deed may not be filed for registration in the Register of Commerce, without it bearing a reason subscribed to the Superintendence in which the favorable rating of such writing is recorded.
Board Directive
Art. 43.-The Board of Directors of the Guarantee Companies shall be composed of a President and a minimum of three and a maximum of seven owners, all with their respective alternates, with the same participation of Partners and Protective Partners. In case of a tie the President will have a vote of quality.
Competition
Art. 44.-It shall be the competence of the Board of Directors of the Company:
a) Deciding on the admission of new members in accordance with the statutes of the company;
b) Fixing the rules governing the operation of the company Board of Directors and perform the necessary acts for the achievement of the social object;
c) Set the maximum amount of guarantees to be granted during the financial year;
d) Set the reference rate and the percentages of the commissions for the services to lend, as well as the maximums and minimums that may be changed by agreement of the same Board;
e) Determine the investments to be made with the equity of the company, within the framework of the guidelines established by this Law;
f) Establish the conditions that the partner will have to meet in order to obtain the guarantee and fix the rules and Applicable procedures for counter-guarantee, referred to in this Act;
g) Grant or deny guarantees to the Partner Partners;
h) Submit to the approval of the General Meeting Ordinary the financial statements and propose
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the application of the results of the exercise;
i) Authorizing the legal representative of the company to grant general and special powers, whether these administrative, commercial or judicial;
j) Authorizing the payment or the application of the debts and the requests for the contributions, prior to Approval of the General Board, maintaining the minimum solvency requirements;
k) Authorizing the transfer of social units;
l) Approving the creation and operating rules of the Management Committees, where represent equal partners and protectors;
m) Appoint the internal auditor, managers and other executives of the Company;
n) Exclude a partner when the cause of exclusion consists of non-compliance by the partner of the obligations guaranteed by the company; and
n) Other functions established by the The statutes of each Guarantee Company.
Obligations and Responsibilities of Directors
Art. 45.-The directors or directors of the Guarantee Companies, at all times must ensure that the guarantees are granted on criteria of administrative efficiency and legality, they will be responsible for the administration of the Society of Warranty, as good merchants in your own business.
Requirements to be Directors
Art. 46.-All members of the Board of Directors of the Guarantee Company must be members of recognized honorability, having knowledge and experience in financial and administrative matters. The President and his/her alternate shall also, at least, credit three years of experience in senior management or administration positions in financial system institutions.
Directors ' Inabilities
Art. 47. -They are not able to perform such charges:
a) Children under twenty-five years;
b) Directors, officials or employees of any other Guarantee Company;
c) Those who are in a state of bankruptcy, suspension of payments or competition from creditors and in no case who would have been judicially qualified as responsible for a wrongful or wrongful bankruptcy;
d) The debtors of the Salvadoran financial system for credits to which they are
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constituted a reserve of consolidation of 50% or more of the balance, in the last ten years before the discharge. This inability shall also apply to directors holding 25% or more of the shares of companies in the situation referred to above;
e) The director, official or administrator of an institution of the financial system, in which it is administratively demonstrated its responsibility for the fact that the said institution, starting with the law of Privatization of the Commercial Banks and the Associations of Savings and Loan, has incurred property deficiencies of 20% or more of the minimum required by the Law, which has received contributions the State, the Deposit Insurance Institution or a Stabilisation Fund for the purpose of its reorganisation or which has been brought by the competent audit body. In the case of legal representatives, general manager, executive director, and directors with executive positions of financial institutions, they shall be presumed to have held responsibility for any of the above mentioned circumstances. The presumption above shall not apply to persons who have ceased their positions two years before such a situation had been presented; nor to those who took part in the reorganisation of financial institutions, in accordance with the requirements laid down in Article 4 (1) of Regulation (EU) No in the Law on the Sanitation and Strengthening of Commercial Banks and Associations of Savings and Loan, without prejudice to the responsibility for which it incurs a posterity to such sanitation;
f) Those convicted of having committed or participated in the commission of any criminal offence;
g) Persons who have been tested judicially participate in drug-related activities, related crimes and those established in the Anti-Money and Asset Laundering Act;
h) Those who have been punished administratively or judicially for their participation in serious infringement of laws and regulations of a financial nature, in particular the collection of public funds without authorization; and
i) The President and Vice-President of the Republic, the Ministers and Deputy Minister of State, Deputies, Magistrates of the Supreme Court of Justice and Magistrates of the House and the Presidents of the Autonomous Institutions.
The causals contained in the literals (c), (e) and (g), as well as that of the first paragraph of the literal (d), which are in the respective spouse of a director, shall entail for him his inability, provided that he is under the deferred community scheme or earnings participation.
General managers, other managers and officials who are authorized to decide on the granting of guarantees, must meet the same requirements and not have the same the inskills that the directors point to this article.
Directors and managers not later than thirty days after taking up his position and in the month of January of each year, shall declare under oath to the Superintendence that they are not indefable to carry out the charge and to inform at the latest the following working day that institution its
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inability, if this occurs later.
When any of the previously mentioned inskill causes exist or exceed, the management of the director or the official concerned will expire and their replacement will be compliance with the Law.
Officials who have Any of the above mentioned skills must cease in the exercise of their functions, subject to the penalties established by the laws. The Audit Committee of the Guarantee Company shall ensure compliance with the provisions contained in the Law and in the event of non-compliance by the official, it shall inform the Superintendence and notify the Attorney General of the Republic of El Salvador, in order to complete the respective process.
Employees will not be eligible for management positions from the respective company in which they work.
External Auditors
Art. 48.-All accounts and operations of the Guarantee Companies shall be issued annually by an external auditor, natural or legal person, who is authorized and registered by the Superintendence.
Reasonability
Art. 49.-The audit shall establish the reasonableness of the administrative management, demonstrate its economic status and analyze all the operational means, financial statements and management management of the Guarantee Company.
actions will be performed in accordance with international accounting standards, the rules issued by the Superintendence, the generally accepted auditing standards and their uniform application.
Minimum Requirements
Art. 50.-The external auditors will have to collaborate with the Superintendence, to which they will provide the information and they will certify on the own matters of their work, that the agency requests in the development of its function of audit.
Superintendence shall establish the minimum audit requirements to be met by the external auditors in respect of the independent audits carried out by the Guarantee Company. You will also have the powers to verify compliance with these minimum requirements.
Audit Committee
Art. 51.-The Guarantee Companies shall have a audit body called the Audit Committee, consisting of a minimum of two and a maximum of four persons appointed by the Ordinary General Board. The Partners and Protectors will have the same number of representatives on this Committee.
The requirements for membership of the Audit Committee are:
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a) Contar with an "A" or "B" rating on existing debts with Banks and other financial institutions, if any; and
b) Not having executive positions within the Guarantee Companies.
The Superintendence will issue the provisions governing the functioning of the Audit Committee.
Audit Committee Functions
Art. 52.-They are the privileges of the Audit Committee:
a) Velar for the compliance of the Law, the agreements of the General Meeting, the Board of Directors and the provisions that the Superintendence issues;
b) To follow up the reports of the internal, external and Superintendency auditor, to subheal the observations they make; and
c) Collaborate on the design and implementation of internal control and propose appropriate corrective measures.
States Financial
Art. 53.-The Guarantee Companies must send to the Superintendence, the financial statements in the opportunities and form that it indicates.
The Superintendence will determine the accounting rules applicable to the Societies of Guarantees and Reafiranzadoras, as well as the reports to be supplied to you, your frequency and content.
CHAPTER III MINIMUM CAPITAL, WEALTH FUND AND RESERVATION APPLICATION
Social Capital Subscription and Payment
Art. 54.-No Guarantee Company may be established without its fully subscribed and paid minimum capital.
In the case of the capital of the constitution, capital contributions shall be credited by deposit of the corresponding sum at the Central Reserve Bank or other means of verification authorized by the Superintendence.
Minimum Capital
Art. 55.-The minimum social capital of the Guarantee Companies may not be less than one million and five thousand dollars from the United States of America. In order to guarantee the solvency of the Guarantee Companies, as financial institutions, the capital indicated in the preceding paragraph may be updated by the Superintendency every two years on the basis of the inflation rate
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accumulated since the date of your last review.
Heritage and Solvency Fund
Art. 56.-The relationship between the Wealth Fund and the sum of its weighted assets will be for the 12% Guarantee Companies. The Superintendence shall draw up the technical standards corresponding to the weighting of the risk assets of those companies.
For the purposes of this Law, the amount of the sum of the amount of the assets shall be: Primary Capital and the Supplementary Capital. For the purposes of determining the Equity Fund, the Supplementary Capital will be accepted for up to the sum of the Primary Capital.
To determine the Primary Capital, the social capital paid, the legal reserve, the Fund of Provisions will be added. Techniques and other capital reserves from perceived profits.
The Supplementary Capital will be determined by adding the results of previous financial years, other non-distributable utilities, 50% of the net profit (a) the income tax for the current financial year and 50% of the consolidation reserves voluntary. This sum shall be deducted from the value of the losses in previous years and in the current year, if any.
They shall not be counted as the Fund, reserves or provisions of liabilities, or those intended to meet the requirements of this financial year. pension, retirement and other benefits which the company may or may voluntarily grant to its staff. Nor will the forecast reserves be computed as are the depreciation and sanitation reserves created according to the technical standards issued by the Superintendence.
Application of Loss and Reduction of Capital
Art. 57.-If there are losses in an exercise, at the meeting of the General Meeting in which such results are known, the agreement must be taken to cover them according to the following order:
a) With the annual earnings of other financial years
b) If these utilities fail to reach, the capital reserves will be applied in their order: Voluntary Reserves, Technical Provisions Fund and the Legal Reserve;
c) If the above applications were insufficient to absorb the balance of the losses, shall be settled by the paid social capital of the company. The decrease in share capital must be made by reducing the nominal value of contributions or by the depreciation of contributions. The value of the write-downs shall be the result of the division of the outstanding balance of the losses, between the number of existing contributions. In the event that capital is insufficient, the decrease in social capital must be effected by the cancellation of all contributions; and
d) In the event that the share capital is reduced to a lower level established in the Article 55 of this Law, the partners shall have a maximum period of 90 calendar days to reintegrate it.
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Creditors may not object to the reduction, where the reduction is solely intended to restore the balance between the capital and the equity of the company diminished as a result of losses and that the assets of the company exceed the passive in double the amount of the agreed decrease.
CHAPTER IV OF OPERATIONS
Operations and Services
Art. 58.-Guarantee Companies may provide the following services and perform the following operations:
a) Grant in favor of their Partners, endorsements, bonds, and other financial guarantees approved by the Superintendency;
b) Provide training, consulting, financial advice and related services;
c) Make investments in accordance with the provisions of this Law;
d) Constituency deposits in financial institutions supervised by the Superintendence;
e) Acquire or retain real estate and furniture, which are necessary for its operation or to provide the related services, provided that its value does not exceed 40% of its Equity Fund;
f) To carry out the analogous and related operations of its regular rotation and in compliance with the object prescribed in this Act;
g) Contreating reaffianzations for the endorsements and sureties granted to the Participating Partners;
h) Accept by the Partners Participates movable and immovable property in warranty;
i) Conduct conventions with institutions financial to facilitate access to the credit of your Partner Partners;
j) RECEIVE GRANTS TO ENCOURAGE ACCESS TO CREDIT TO SPECIFIC DESTINATIONS. SUCH RESOURCES, ACCORDING TO THE WILL OF THE DONOR, MAY BE USED TO COVER THE PAYMENTS MADE BY THE GUARANTEE COMPANY ON BEHALF OF THE PARTNERS INVOLVED UNDER THE GUARANTEES GRANTED FOR SUCH DESTINATIONS, AND; (2)
k) OTHER OPERATIONS THAT APPROVE THE SUPERINTENDENCE. (2)
Assets for Operation
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Art. 59.-The Superintendence will dictate the technical standards to effect and authorize the valuables of the movable and immovable property referred to in the literal e) of the previous article.
Extraordinary Assets
Art. 60.-Guarantee Companies may acquire movable, immovable and other rights, of any kind, when such acquisition is effected in any of the following cases:
a) When, in the absence of other means of payment, they have to accept them in cancellation, in whole or in part, of amounts resulting from honored guarantees; and
b) When they are awarded to them under judicial action promoted against their debtors. The assets thus acquired are considered extraordinary assets.
Extraordinary Asset Liquidation
Art. 61.-The extraordinary assets acquired by the Guarantee Companies in accordance with the provisions of the preceding Article shall be settled by the Guarantee Company within two years of the date of their acquisition. In justified cases, this time limit may be extended by the Superintendence for up to 80 days.
If, at the expiration of these periods, the Guarantee Company has not liquidated the extraordinary assets, it shall be obliged to provide them as lost in their accounts and sell them at public auction within three years of the date of the expiry of the deadline.
The basis of the auction shall be the actual value of the assets, as estimated by the company itself. If there are no bidders, the auctions shall be repeated at the latest every three months, or six months in the case of real estate, taking as a basis for these new auctions a price that will be less and less than the previous one, in the amount of up to 20%.
If after an auction, a buyer appears offering a sum equal to or greater than the value that served as the basis for that auction, the Guarantee Company may sell the goods without further processing, at the price of the offer.
If the Superintendence detected irregularities in the auction process, it may require the repetition of such a process, provided that the respective furniture or building had not been sold.
The Guarantee Companies may retain or to donate the goods referred to in this Article provided that they are intended for works constituting a benefit to the community, or for cultural purposes, or to preserve them for their own use or for the welfare of their staff, prior to the authorization of the Superintendence.
The Superintendence will dictate the corresponding technical norms for the application of this article.
Investment Regime
Art. 62.-GUARANTEE COMPANIES MUST INVEST AT LEAST 80% OF ITS
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LIQUID RESOURCES IN THE FOLLOWING TYPES OF SECURITIES:
(a) CERTIFICATES OF DEPOSITS OF FINANCIAL INSTITUTIONS SUPERVISED BY THE SUPERINTENDENCE, UP TO 15%;
(b) SECURITIES ISSUED BY THE MINISTRY OF FINANCE UP TO 40%;
c) VALUES ISSUED BY THE BCR, UP TO 40%;
d) VALUES ISSUED BY THE BMI, UP TO 40%;
(e) SECURITIES ISSUED BY AUTONOMOUS INSTITUTIONS OR CREDIT OFFICERS, EXCLUDING THE SOCIAL FUND FOR HOUSING, UP TO 20%;
F) SECURITIES ISSUED BY THE SOCIAL FUND FOR HOUSING, UP TO THE 15%;
g) SECURITIES ISSUED BY BANKS, UP TO 30%;
H) SHARES AND CONVERTIBLE SECURITIES OF NATIONAL COMPANIES, UP TO 10%; AND
I) OTHER PUBLIC OFFERING INSTRUMENTS, UP TO 20%. (2)
Issuer and Emission Diversification
Art. 63. -the sum of investments in deposits and securities issued or guaranteed by a single entity or group of companies, may not exceed the following limits:
a) 20% of the total assets of the Guarantee Company, at the beginning of its transactions or 31 December or 30 June of the last accounting year, the date closest to the transaction;
b) 20% of the issuer's asset; and
c) 20% of the issuer's business asset.
Except for the the provisions referred to in this Article, investments in securities issued or guaranteed by the Ministry of Finance, the Central bank and the BMI.
For the purposes of this Act, the business group definition is the one established in the Securities Market Act.
Linked Warranty Societies
Art. 64.-When two or more Guarantee Companies are linked, the limits set out in this Law shall be understood to govern the sum of the investments of all the related companies.
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For the purposes of this provision, related companies shall be understood to be established in the Securities Market Act.
Prohibited Operations to Guarantee Companies
Art. 65.-Guarantee Companies may not perform the following operations:
a) Grant direct credits;
b) Grant endorsements, sureties, and other guarantees to natural and/or legal persons other than Partners Participates;
c) Grant credits directly or indirectly to the State and municipalities; and
d) Intermediate or offer insurance directly in accordance with the Insurance Companies Act.
Applicable to Guarantees
Art. 66.-The status of members of the persons guaranteed or guaranteed by the Guarantee Company shall not affect the legal status of the guarantees and guarantees granted, which shall be of a commercial nature and shall be governed in the first place by the covenants. If they exist, and, secondly, by the general conditions contained in the statutes of the company, provided that both one and the other are not contrary to applicable legal norms.
The relationship between the Society of Guarantee and the partner in whose favour a security has been granted must be formalised, for validity, in writing public or printed form signed by the parties and authenticated by a notary.
Guarantee companies may not grant guarantees and guarantees to a related partner or companies when they exceed 5% of their equity fund.
Applicable to Operations
Art. 67.-The qualification and weighting of guarantees granted by the Guarantee Companies, especially in the financial system, will be determined by the Superintendence.
Tax Regime
Art. 68.-The Guarantee Companies shall be subject to the same tax provisions as financial institutions.
The interest, commissions and services received by the Guarantee Companies shall be governed by the provisions of the provisions of this Agreement. Tax on the Transfer of Furniture and the provision of services when it relates to banking institutions or non-banking financial institutions.
CHAPTER V
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TRUST SYSTEM DEVELOPMENT TRUST
Objectives
Art. 69.-It is created, the Trust for the Development of the Reciprocal Guarantee System or Trust, being the government of El Salvador through the Ministry of Finance, the trust the BMI and as trustees the micro, small and Rural and urban medium-sized enterprises through the Guarantee Companies, the Reafianzadora and the Government of El Salvador. The trustee and the trustee shall establish the conditions under which the present trust shall be governed by monitoring that it is not contrary to this Law. The aforementioned Trust will aim to promote the development of the Reciprocal Guarantee System in El Salvador, mainly by carrying out the following activities:
a) Promote the creation of Guarantee Societies;
b) Participate as an investor in the assets of the Guarantee and Reafianzadora Societies; and
c) To promote the development of micro, small and medium rural and urban enterprises.
Resources
Art. 70.-The Trust's wealth resources will be:
a) State export for this purpose;
b) Amounts, voluntary contributions, donations from national or foreign agencies and institutions directly related to the Trust objectives;
c) Utilities resulting from the Trust's operations; and
d) CONTRIBUTIONS FROM THE MULTISECTORAL INVESTMENT BANK. (1) (2) Finalities
Art. 71.-The Trust will have the following purposes:
a) To participate as a protective partner in the Guarantee Societies in the process of training or in operation provided that they meet the conditions established by the Trust. In no case shall the Trust be a single protective partner and its participation shall not be greater than 60% of the equity of the Guarantee Company, in which it invests;
b) Investing in the Guarantee and Reafianzadora Societies;
c) Develop research and proposals that will allow for greater participation of specific sectors and activities of micro, small and medium enterprises in the Guarantee Societies;
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d) Strengthen the Guarantee Societies and the Reafianzadora Society, as well;
e) Promote training and provide technical assistance to the Guarantee and Reafianzadora Societies; and
f) Other that are determined by the The Ministry of Finance has always been the subject of the is within the objectives of the Trust.
Trust Functions
Art. 72.-The duties of the trustee shall be:
a) Approve and modify the instructions containing all the necessary conditions for the fulfilment of the Trust's objectives and responsibilities;
b) Approve or deny the Trust participation requests as a protective partner in the Guarantee and Reafianzer Societies;
c) Approve the Trust's annual operating and investment budget;
d) Approve the Financial Statements of the Trust;
e) Annually designate the External Auditor, whose payment will be made by the Trust;
f) Designate the Trust representatives in the Warranty Societies where you participate as a Protector Partner;
g) Approve the Labors Memory;
h) Contry to the Trust account the staff required for the development normal of the activities of the same;
i) Manage the Trust's financial resources;
j) Tracking the evolution of the System; and
k) Other functions that the trustee assigns to you.
Bans Trust
Art. 73. Under no circumstances shall the Trust be able to:
(a) Participate with more than 50% in the social capital of the Guarantee Company, after five years of constituted; and
b) Be shareholders in institutions other than the Company Guarantee or Reafianzadoras.
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Trust Faculties Delegation
Art. 74.-The BMI may delegate the functions referred to in Article 72 (a), (b), (h) and (j) in a Technical Committee composed of four owners and their alternates. This Committee shall be appointed by the Board of Directors of the BMI and its members shall be persons with experience in the management and development of institutions giving guarantees to the productive sectors, and shall be included in that Committee.
Board of Directors of the BMI will issue the corresponding provisions for the election, replacement, removal and operability of the Trust's Technical Committee.
Art. 75.-The requirements and inabilities to be a member of the Technical Committee shall be in harmony with those established to the Directors of the non-Banking Financial Intermediaries in their respective Act.
Obligations of the Trusts
Art. 76.-The obligations of the trustee will be:
a) To carry the resources that will form the Trust's initial patrimony;
b) To pay annually to the trustee for the administration of the Trust the commission established according to the Trade Code in Article 1251. Such a commission shall be charged by the Trust in charge of the Trust; and
c) Constituir the present Trust and establish the conditions by which it shall be governed that it shall not be contrary to this Law.
CHAPTER VI MUTUAL GUARANTEE SOCIETIES REAFIANZADORA
Nature and purpose
Art. 77.-The Reafiranzadoras will be constituted in the form of a public limited company.
These will have the exclusive purpose:
a) Resupport the portfolios of guarantees and guarantees granted by the Guarantee Companies, in the percentages established in the social statutes of the Reafianzadora; and
b) Reinforce the portfolios covered by the Guarantee Companies, with other National or International Institutions.
Functions
Art. 78. The Reafianzadora may have among other functions, the following:
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(a) Evaluate the Guarantee Companies that request to be reestablished by this Company; and
b) Charge the services for the recovery of the Guarantee Companies, if any, as established by the social statutes, taking into account technical guidelines with regard to institutional risks and sinister in the respective reestablished portfolios.
Denomination
Art. 79.-The Reafiranzadoras may adopt and register any trade name or denomination which they believe to be appropriate so that they do not belong to another entity and do not lend themselves to confusion. The Reafianzadora indication of Reciprocal Guarantee Societies, which is exclusive to this type of company, must necessarily be included. When the abbreviation R.S.G.R. is used, it must be included at the end of the name.
No Reafianzadora will use in its denomination the expression "National" or any other that may suggest that it is an organization created by the Status.
The Trade Registry will not enroll those Reafianzadoras whose denomination is opposed to the provisions of this article.
Objectives
Art. 80.-The Reafianzadora shall have the following objectives:
a) Support the System by providing sufficient cover and guarantee for the risks incurred by them; and
b) Increase the coverage capacity of the Guarantee Companies, by subscribing to reafirench contracts.
Social Capital Constitution
Art. 81.-The social capital of the Reafianzadora shall be composed of:
a) The contributions of the partners;
b) The increases resulting from the profits resulting from the Company's operations; and
c) Other contributions or donations.
Minimum Capital
Art. 82.-The initial minimum capital of the Reafianzadora shall be one and one hundred and forty-five thousand dollars of the United States of America, which shall be subscribed and paid at the time of its constitution.
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Number of Partners
Art. 83.-The minimum number of partners will be stipulated for the public limited liability companies.
Wealth and Solvency Fund
Art. 84. In order to maintain its solvency constantly, the Reafianzadora must present at all times a ratio of at least 12% between its equity fund and the sum of its weighted assets.
The Superintendence of the System Financial will issue the regulations corresponding to the weighting of the assets of the Reafianzadora.
Administration
Art. 85.-The Reafiranzadoras will be governed by the provisions legally for the public limited companies, with the particularities and exceptions that this Law has.
Requirements and Inabilities of Directors
Art. 86.-The members of the Board of Directors of the Reafianzadora, the regulations contained in Articles 46 and 47 of this Law shall apply.
Sanitation Reserves
Art. 87.-The Reafianzadora shall constitute the respective reserves of sanitation, based on the qualification that the company carries out of the risks it possesses in each Guarantee Company, according to the technical standards established by the Superintendence.
Bans
Art. 88.-The Reafianzadora shall have the following prohibitions:
a) Investing its resources in shares and units of companies;
b) Investing in contravention of the provisions of the investment regime defined in Article 20 of the Art. 68 of this Law;
c) Use its resources to finance or cover expenses other than activities established in this Law; and
d) You may not grant endorsements or sureties directly in favor of private or state enterprises.
Audit
Art. 89.-The Reafianzadora will have an External Audit Office and an Internal Auditor, who will have to comply with the requirements established by the Superintendence to exercise their position. The Board of Directors
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of the Society will choose both audits.
Monitoring
Art. 90.-The Reafianzadora will be subject to the supervision of the Superintendence, which will issue all necessary technical standards to efficiently perform its supervisory function.
Regulations
Art. 91. -The Board of Directors is the governing body that will issue resolutions that will enable it to comply with the functions and objectives of the Reafianzadora.
Applicable Regime
Art. 92.-The provisions of the Guarantee Companies, of the Code of Commerce, of the Civil Code and other relevant laws shall apply as far as is not regulated in this chapter.
CHAPTER VII MERGER, REGULARIZATION, DISSOLUTION, AND LIQUIDATION
Superintendence Cost of Superintendence
Art. 93.-The Guarantee and Reafianzadoras Companies will contribute to cover the costs for the supervision services of the Superintendency, paying the Central Bank, as determined, part of the annual budget of the Superintendence taking as a basis for calculating half of the rate paid by the banks in a manner proportional to their total assets, as the balance sheet corresponding to the close of the financial year of the previous immediate calendar year. The total assets include guarantees, guarantees, bonds, or refunding and other contingent items.
The portion of the Superintendency budget that will cover the Guarantee and Reafianzadoras Companies will be added to the the budget to cover banks and non-bank financial intermediaries.
Fusion
Art. 94.-Guarantee companies may only merge with other companies of their same nature.
The merger of a Guarantee Company will require prior authorisation from the Superintendence, with the same requirements as for its constitution, according to this Law and according to the regulations that it approves.
Solvency Problems Regularization
Art. 95.-When a Company of Guarantee or Reafianzadora does not comply with the minimum solvency requirements set out in this Law, the society concerned must inform the Superintendence and present a Plan of Regularization, within the The following ten business days of the
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finding of the fact. In the event that the non-compliance is below 12% and up to 6% as set out in Articles 56 and 57 of this Law, or that the losses represent up to 50% of the Company's Wealth Fund, the Superintendence will grant a period of up to ninety days to the Board of the society concerned to regulate their situation.
If the deterioration of the entity is greater than the above mentioned in the previous paragraph, then the time limit set will be forty-five days.
It is understood that the situation of the company has become normalized, if the relationship of the Fund (a) the weighted risk assets referred to in Article 55 (1) of this Law are equal to or greater than 12%.
Regularization Plan
Art. 96.-In the cases referred to in the previous Article, the company concerned must submit to the Superintendence a plan for regularisation with the measures it has taken or will take to solve the problem within the time limit. established. At the end of that period, the external auditor of the company must certify to the General Board and the Superintendency if the company complied with the plan and if it has recovered the minimum solvency levels.
The Superintendence will approve the plan for regularisation where appropriate with the observations which it is appropriate to incorporate and order the company to convene an Extraordinary General Meeting to be held at the end of the period, in order to be informed of the the results of the regularisation process, in which the certification that will have to appear as agenda items will extend the external auditor of the entity, as well as the respective agreement of the Superintendence in which it is pronounced on the subject.
In the case that the external auditor certifies that the solvency of the society has not recovered in the term The Superintendence must revoke the authorization to operate the aforementioned entity, which will lead to the fact that it will no longer be able to continue to develop its social purpose. In such an event the Extraordinary General Meeting convened in accordance with this article, must remove the Board of Directors and appoint an executor of the agreements taken in the referred Board, who in turn will manage the society until In the case of the Court of Justice of the European Union,
Court of Justice of the European Court of Justice and the Court of Justice
the European Court of Justice of the European Union Extraordinary General Meeting or constitution is not adopted the agreements that the Law, the External Auditor convene a new Extraordinary General Meeting, which will be held with the assistants, in this the assistant protective partners will have to appoint an administrator of the society with their alternate, who in addition will have the legal representation of the company until the liquidators are appointed. This procedure will also be observed in the event that the Superintendence resolves not to grant any time limit to the entity, to recover its solvency.The Superintendence will ask the Attorney General of the Republic, within the following ten days, after having known the terms of the certification issued by the external auditor, that requires judicially the dissolution and forcible liquidation of that society and the appointment of the liquidators; the request to the Prosecutor General be accompanied by the necessary report, evidence and information
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that request. The Office of the Prosecutor General shall, within three days, ask the judge for the dissolution and liquidation of the company by sending him the respective file.
Declaratory of Dissolution and Forced Settlement of a Company
Art. 97.-Within the second day of receipt of the file, the judge will send to hear for three days from the notification to the current representatives of the society.
The term of three days to answer the hearing will be counted from the day after the date of notification to the society representatives.
Statement
Art. 98.-The court or the representatives of the company shall be held or not, the judge shall give judgment within the following three days, and shall order the dissolution and liquidation of the Society of Guarantees or Reafianzadora.
If any opposition, the judge shall give judgment within the term of an unextended period of 15 days from the hearing of him or the representatives, and if the judgment is an estimate, shall order the requested dissolution and liquidation. In such a case there will be no special condemnation on coasts.
Appeal
Art. 99. -The judgment will be appealed in the suspensory effect before the respective court of second instance. If necessary, the cause for trial will be opened for eight days, with the quality of all the charges, following in the rest the procedures that for the appeal in the written trials prescribes the Code of Civil Procedures, without any of cars. The court of second instance shall give judgment within a period of not more than 15 days. What the court of second instance resolves will not be supported by any recourse.
Global Transfer of Assets and Contingencies
Art. 100.-Where a Guarantee or Reafianzer Company which is in liquidation has completed all or most of its assets and contingencies or a substantial part of them to another regulated entity which may carry out such operations, This must be done by granting a public deed in which the goods transferred are indicated globally, in the amount and in the balance sheet, according to the last balance audited by the Society of Guarantees or Reafianzadora. In the case of a contingency transfer, they must be accompanied by their respective contributions.
Full transfer
Art. 101.-In the case referred to in the previous article, the tradition of the goods and their corresponding guarantees and ancillary rights shall operate in full right, without the need for endorsements, notifications or inscriptions, except in the case of goods real roots and guarantees, in which the respective writing must be entered in the competent register.
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Vigency of Guarantees
Art. 102.-The guarantees granted by a Company of Guarantees or Reafianzadora in the process of liquidation will maintain the terms and conditions originally agreed, however the liquidators are empowered to transfer these guarantees without The need for express consent of the debtor or to make transactional arrangements for its payment.
Immediate Demiability of Passive
Art. 103.-The forcible liquidation of a Company of Guarantees or Reafianzadora will result in the immediate enforceability of all liabilities and payments shall be made in accordance with Articles 111 and 112 of this Law.
Unclaimed Securities
Art. 104.-If the forced liquidation of a Company of Guarantees or Reafianzadora has not been claimed the cash or securities of the asset belonging to its creditors, these shall be deposited in the Central Bank, in the name of them, by the the liquidators.
The Central Bank shall retain these assets for the period of ten years from the date of its deposit, and may make the corresponding payments with the superintendence. Expired term, unclaimed balances will be prescribed in favor of the State.
For the pending litigation rights, the ten-year period governs from the date of the last executed judgment.
Surrender of the Asset Resulting from the Liquidation
Art. 105.-The obligations of the Guarantee Company shall be extinguished, the resulting asset shall be distributed among the partners in proportion to the number of shares in which they are holders. The statutes may exclude from participation in the distribution of any reserves to the members who have been admitted since the previous five years.
Distribution of Final Remainer
Art. 106.-When he or the liquidators have fully paid the obligations of a Company of Guarantee or Reafianzadora in forced liquidation and complied with the provisions of Article 102 of this Law and whenever it has remained, it shall convene the Extraordinary General Meeting of Partners.
Procedural Limitations
Art. 107.-During the forced liquidation of a Company of Guarantees or Reafianzadora, no judicial proceedings may be initiated against them, no embargoes, charges or other precautionary measures may be imposed on their property, or to follow the procedures for executing judgments on the basis of court rulings, because of obligations previously incurred.
Lifting of Inventory by Liquidators
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Art. 108.-As soon as he or the liquidators have assumed control of a Company of Guarantees or Reafianzadora in forced liquidation, they will proceed to lift a notarial act that will contain the inventory of that entity. The liquidators will retain the original of the minutes, and a copy of the act must be filed with the Superintendence.
Persons with legitimate interest may obtain information and certification from those inventories or other lists in the liquidator's office.
Notification to Creditors
Art. 109.-He or the liquidators shall notify by notices published in two newspapers of national circulation, during sixty calendar days, in fortnightly form, any natural or legal person who may have rights against the Society of Guarantees or Reafianzadora in liquidation, to make your claim and to register your right with sufficient proof of evidence, within ninety days after the date of the last publication and at the place specified therein.
notification shall indicate the last working date for the submission of such tests after the which no claim will be accepted, except the creditor's rights to enforce them on the ordinary course.
Publication of Financial Statements
Art. 110.-The Superintendence shall publish on behalf of the Company of Guarantees or of the Reafianzadora in liquidation, at least twice a year, in half-yearly form, financial statements that inform on the situation of the entity in liquidation Together with the full opinion of the External Auditor, without the need for them to have been approved by a General Board.
Prelate of payments of S.G.R.
Art. 111.-The payments to be made in the settlement process of a Guaranty Society shall keep the following order:
a) The salary, social and food benefits;
b) Other obligations that enjoy privilege in the country;
c) The obligations arising from guarantees and guarantees granted by the Company of Guarantees;
d) The balances due to the Reafianzadora for recovery of honras;
e) The balances due to the Trust;
f) obligations in favour of the State and municipalities;
g) Other balances due to third parties; and
(h) The remainder, if any, shall be distributed among the members according to their social interests.
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R.S.G.R. Payment Ratio
Art. 112.-The payments to be made in the process of settlement of a Reafianzadora will keep the following order:
a) The salary, social and food benefits;
b) The other obligations that enjoy privilege in the country;
(c) Obligations arising from reendorsements and re-afianzations granted by the Reafianzadora;
d) The balances due to the Trust;
e) Obligations in favour of the State and the municipalities;
f) Other balances due to third parties; and
g) The remainder, if any, shall be shared among the partners.
Dissolution and Voluntary Settlement
Art. 113.-The General Board of Partners of the Company of Guarantees or Reamphianzadora, in the face of the recognition of a legal causal of dissolution that does not mean, insolvency, as long as its assets reach to cover its liabilities more the contingencies than they are reasonably appropriate, as certified by the external auditor of the company, to voluntarily agree to the dissolution and liquidation of the company.
The liquidation shall be carried out in accordance with the provisions of the Chapter XI, Title II of the First Book of the Code of Commerce, in all that it does not object to the present Chapter.
Liquidator Commission
Art. 114.-For the practice of voluntary liquidation operations, a Liquidator Commission, composed of a representative for each type of partner and their respective alternates, shall be constituted in order to act in the name and representation of these.
Effects of Dissolution on Reimbursement of Participations
Art. 115.-The agreement to dissolve the company will be suspended, the partners ' right to demand the reimbursement of their social contributions will be suspended.
CHAPTER VIII TRANSIENTS
Investments of the Trust
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Art. 116.-THE TRUST MAY INVEST IN GUARANTEE COMPANIES AND IN A REAFIANZADORA. (2)
Creating the First Warranty and/or Reafianzer Society
Art. 117. In order to give continuity to the credit guarantee service for the micro, small and medium enterprise, the Trust for the Development of the System, may constitute a Guarantee Society and a Reafianzadora, being able to be the only one partner, and must comply with the other requirements set forth in this Law for the formation of such a company.
Sale of shareholdings
Art. 118. IN THE GUARANTEE COMPANY TO CONSTITUTE ACCORDING TO THE PREVIOUS ARTICLE, THE TRUST AS A PROTECTIVE PARTNER MAY SELL FROM THE FIFTH YEAR OF ITS CONSTITUTION, ITS SHARES TO EACH PARTNER, ACCORDING TO THE RESPECTIVE REGULATIONS, WHICH IT MUST BE ISSUED BY THE TRUSTEE AND THE TRUST OF COMMON AGREEMENT, BEING ABLE TO SELL THE REST OF ITS PARTICIPATIONS TO OTHER PROTECTIVE PARTNERS.
HOWEVER, ONCE THIS GUARANTEE COMPANY HAS BEEN ESTABLISHED, OTHER PROTECTIVE PARTNERS MAY PARTICIPATE WITH ADDITIONAL CONTRIBUTIONS.
IN ADDITION, IT WILL BE ABLE TO REENTRENCH FOR UP TO TEN YEARS THE OBLIGATIONS OF THE GUARANTEE COMPANIES AS LONG AS THERE ARE NO REINING COMPANIES OPERATING WITHIN THE SYSTEM OF RECIPROCAL GUARANTEES. (2)
Contribution
Art. 119.-The Trust may contribute during the first three years of the System and without prejudice to the provisions of Art. 93, with up to 70% of the annual budget established by the Superintendence for the supervision of the Society of Warranty and the Reafianzadora Society.
Auxiliary Regulations
Art. 120.-The Superintendence must approve, within a maximum period of one hundred and eighty days, the technical standards applicable to the institutions supervised by it in the System.
CHAPTER IX VALIDITY
Art. 121. -This Law will enter into force on the thirty days of its publication in the Official Journal.
GIVEN IN THE LEGISLATIVE PALACE: San Salvador, at the twentieth day of September of the year two thousand one.
WALTER RENÉ ARAUJO MORALES, PRESIDENT.
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CIRO CRUZ ZEPEDA PENA, JULIO ANTONIO GAMERO QUINTANILLA, VICE PRESIDENT. VICE PRESIDENT.
CARMEN ELENA CALDERÓN DE ESCALA, JOSÉ RAFAEL MACHUCA ZELAYA, SECRETARY. SECRETARY.
ALFONSO ARISTIDES ALVARENGA, WILLIAM RIZZIERY PICHINTE, SECRETARY. SECRETARY.
RUBEN ORELLANA, AGUSTIN DÍAZ SARAVIA, SECRETARY. SECRETARY.
CASA PRESIDENTIAL: San Salvador, at the twenty-seventh day of September of the year two thousand one.
PUBESCOSE, Francisco Guillermo Flores Pérez,
President of the Republic.
Miguel Lacayo, D. O. N/ 199 Minister of Economy. Volume No 353 Date: 22 October 2001.
REFORMS:
(1) D.L. Nº 821, 19 APRIL 2002; D.O. Nº 89, T. 355, 17 MAY 2002
(2) D.L. No. 223, DECEMBER 11, 2009; D.O. No. 239, T. 385, DECEMBER 21, 2009.
CGC/sv 20/01/10
