Libro I · Título I Capítulo VIII. Aumento y reduccion de capital

The increase or reduction of the corporate capital must be resolved by the corresponding organ in each of the companies, in the form and terms determined by its articles of incorporation, and the resolution shall include the amount of the increase or reduction and the form of payment.

In share-based companies, the increase of authorized capital may be agreed by means of the issuance of new shares or by increase of the nominal value of the shares; in both cases, the shares must be registered shares.

The issuance, subscription and payment of shares within the limits of the authorized capital shall be governed by the provisions of the articles of incorporation. In all cases, the issuance of shares must be carried out solely with registered shares.

In limited liability companies, the deed of capital increase may not be executed if it is not conclusively evidenced that the capital increase has been integrally and effectively paid.

The resolution of capital increase shall be executed as a public deed and registered in the Mercantile Registry.

The payment of the increase may be made in any of the following forms:

1ºIn money or in another class of property.

2ºBy compensation of the credits held against the company by any class of creditors.

3ºBy capitalization of profits or of reserves.

The organ that agrees the capital increase shall establish the bases to carry out the foregoing operations, in accordance with the rules set forth in Articles 27, 28, 29 and 91 of this Code.

In the case of capitalization of reserves or profits, the new corporate contributions, or the shares of the new issuance, shall have the same characteristics as the previous ones. The new corporate contributions or the shares of this new issuance shall be assigned gratuitously to the partners or shareholders in direct proportion to the shares they held on the date on which the increase was agreed.

The increase of the corporate capital by means of the raising of the value of the shares requires the unanimous consent of the shareholders, if new contributions in cash or in kind are to be made.

The capital may be reduced by decrease of the value of the corporate contributions, by decrease of the nominal value of all the shares or by amortization of some of them.

Under the personal liability of the administrator or administrators and of the auditing organ, if any, the resolution shall be sent by the fastest mail, with acknowledgement of receipt, to all the creditors of the company whose address is known.

The resolution of reduction of capital must be registered in the Mercantile Registry. For the procedure, a notarial record must be submitted in which the respective resolution is transcribed and the declaration of compliance with the obligation mentioned in the second paragraph of the preceding article.

Within the thirty days following the last publication, any interested party may oppose the reduction of capital in a summary proceeding, before a Judge of First Instance for Civil Matters.

The public deed containing the reduction of corporate capital may only be executed after the said time limit has expired, if there is no opposition from third parties or if, there being opposition, the debts are paid or duly secured at the discretion of the Court. The certified copy must be submitted to the Mercantile Registry.