Libro II. De las obligaciones profesionales de los comerciantes

The Mercantile Registry shall operate in the capital of the Republic and in the departments or zones that the Executive Branch determines. The registrars must be Attorneys and Notaries, active members of the bar, Guatemalan by birth, have at least five years of professional practice, and their appointment shall be made by the Executive Branch through the Ministry of Economy.

The registrar of the capital shall inspect, at least twice a year, the other mercantile registries, and of the faults or defects that he observes he shall immediately report to the Ministry of Economy, proposing the measures that he deems pertinent.

The Executive Branch, through the said Ministry, shall issue the fee schedules and regulations that may be applicable.

The Mercantile Registry shall be public and shall keep the following books:

1º.Of individual merchants.

2º.Of mercantile companies.

3º.Of mercantile enterprises and establishments.

4º.Of commercial auxiliaries.

5º.Of presentation of documents.

6º.The books that are necessary for the other registrations required by law.

7º.Indexes and auxiliary books.

These books, which may be formed by the loose-leaf system, shall be folioed, sealed and initialed by a Civil Judge of First Instance, stating on the first and last folio the matter to which they refer.

The books of the Mercantile Registry may be replaced at any moment and without the need of any procedure, by other more modern systems.

Registration in the jurisdictional Mercantile Registry is mandatory:

1º.Of the individual merchants who have a capital of two thousand quetzales or more.

2º.Of all the mercantile companies.

3º.Of mercantile enterprises and establishments comprised within these extremes.

4º.Of the facts and legal relationships that the laws specify.

5º.Of the commercial auxiliaries.

The registration of individual merchants, commercial auxiliaries and of the mercantile enterprises and establishments must be requested within one month of having been constituted as such or of having opened the enterprise or the establishment.

That of the companies, within the month following the execution of the deed of incorporation. This same time limit applies to the other facts and legal relationships.

The registration of the individual merchant shall be made by means of a sworn statement of the interested party, set forth in a form with authenticated signature, which shall comprise:

1º.Complete names and surnames, age, marital status, nationality, domicile and address.

2º.Activity to which he devotes himself.

3º.Economic regime of his marriage, if he is married or in a de facto union.

4º.Name of his enterprise and its establishments and their addresses.

5º.Date on which he began his commercial activity.

The registrar shall endorse the identity card of the interested party.

The registration of the mercantile enterprise or establishment shall be made in the form provided in the preceding article, which shall comprise:

1º.Name of the enterprise or establishment.

2º.Name of the owner and number of his registration as a merchant.

3º.Address of the enterprise or establishment.

4º.Object.

5º.Names of the administrators or factors.

The registration of mercantile companies shall be made on the basis of the respective certified copy, which shall comprise:

1º.Form of organization.

2º.Corporate name or denomination and trade name if there is one.

3º.Domicile and that of its branches.

4º.Object.

5º.Term of duration.

6º.Capital stock.

7º.Notary who authorized the deed of incorporation, place and date.

8º.Administrative bodies, powers of the administrators.

9º.Supervisory bodies if it has them.

Whenever it concerns companies whose object requires a state concession or license, it shall be indispensable to attach the government agreement or the corresponding authorization, and the registration term shall begin to run from the date of the agreement or authorization.

Apart from the facts and legal relationships that the laws specify, the registration of the following is mandatory:

1.The appointment of administrators of the companies, of factors and the granting of mandates by any merchant, for operations of his enterprise.

2.The revocation or the limitation of the appointments and mandates to which the preceding subparagraph refers.

3.The creation, acquisition, transfer or encumbrance of an enterprise or mercantile establishment.

4.The marriage settlements of individual merchants and their modifications, as well as the inventory of the property belonging to the persons subject to their parental authority or guardianship.

5.The modifications of the articles of incorporation of mercantile companies, the extension of their term and the dissolution or liquidation.

6.The constitution, modification and extinction of rights in rem over the enterprise or its establishments.

7.Any change that occurs in the data of the initial registration and any fact that affects them.

8.The issues of shares and of other securities that entail obligations for mercantile companies, expressing their series, value and amount of the issue, their interest, premiums and amortizations and all the circumstances that guarantee the rights of the takers. The operations to which this subparagraph refers shall be registered exclusively in the Mercantile Registry.

9.The Agents, Distributors and Representatives.

The matters to which the preceding subparagraphs refer shall be noted in all the registrations affected by the act in question.

The acts and documents that in accordance with the law must be registered shall only take effect against third parties from the date of their registration in the Mercantile Registry. No registration may be made altering the order of presentation.

The interested parties themselves, the Civil Judges of First Instance, the Notaries who authorize the acts subject to registration and any person who has an interest in securing a right or in authenticating a fact susceptible of registration may request the registration.

Once the registration of a company or of any modification to its articles of incorporation is requested, the Registrar, having seen the respective certified copy, if the deed fulfills the legal requirements and does not contain provisions contrary to the law, shall make the provisional registration and shall bring it to the knowledge of the public by means of a notice at the expense of the interested party published in the Official Gazette.

This notice shall contain a summary of the details of the registration enumerated in article 337 of this Code or of the modification in question and the date on which the provisional registration was made.

If it concerns general partnerships or limited liability companies, it is mandatory to publish the name of all the partners.

After sixty days (60) have elapsed from the date of the provisional registration without the publication of the edict having been submitted, the Registrar shall order the cancellation of the provisional registration.

The registrar shall deny the registration, in a reasoned manner, if from the examination of the deed and of the registry information it appears that:

a)In its execution the legal requirements were not observed or its stipulations contravene the law.

b)The corporate name or the denomination is identical to another registered one, or is not clearly distinguishable from any other.

In any case, before denying the registration, the Registrar, in a reasoned manner, shall give the applicant a time limit of five days to remedy any deficiency. Against what is resolved in the case of denial contemplated in this article, the provisions of article 350 shall be followed for the purposes of challenge.

Eight business days after the date of the publication, if there is no objection from an interested party or from the Public Prosecutor's Office, nor any objection of those enumerated in the preceding article, the Registrar shall make the definitive registration, whose effects shall be retroactive to the date of the provisional registration, and shall return the respective certified copy with its endorsement.

The registrar shall issue free of charge the commercial license to every company, individual merchant, commercial auxiliary, enterprise or establishment that has been duly registered.

This license must be placed in a visible place of every enterprise or establishment.

The registration of acts other than those of the mere establishment or incorporation shall be made by fulfilling the requirements and procedures established for the initial registration, having seen the documents that are presented; the signatures of the grantors of private documents must be legalized.

The qualification of the legality of the documents that the registrars make shall be understood as limited for the purpose of denying or admitting the registration and shall not impede or prejudice the judgment that may be pursued in the competent tribunals over the nullity of the same document.

The registrar shall not judge the legality of the judicial or administrative order that decrees a registration. If he believes that it should not be made, he shall so inform the respective authority. If despite this the latter insists on the registration, it shall be made, inserting in the registration the official letter in which it was ordered, and the original shall be filed.

Nevertheless, the registrar may refuse to make the registration when the reason that in his judgment must prevent it results from the registry books.

Against the qualification of the registrar a claim may be filed before the jurisdictional Civil Judge of First Instance, whether it concerns acts or decisions.

The claims shall be processed in accordance with the incidental procedure.

Whoever claims against the qualification of the registrar shall be entitled to obtain, upon his request, a preventive annotation of the document in question.

If the competent authority orders the registration of the document, its effects shall be retroactive to the date of the preventive annotation.

Except as provided in the following paragraph, oppositions to the registration of mercantile companies must be heard, by the Incidental Procedure, before a judge of first instance of the domicile of the entity against whose registration the opposition is filed.

Oppositions to the registration of mercantile companies relating to the corporate name, the corporate denomination or the trade name shall be resolved by the Mercantile Registrar, based on the records of the Industrial Property Registry or of the Mercantile Registry itself that the parties produce to demonstrate their right. If it is the case, he shall deny the definitive registration and cancel the provisional registration. Against what is resolved by the Mercantile Registrar in this case, no appeal whatsoever lies. Liability for those businesses and contracts carried out during the validity of the provisional registration is governed in accordance with article 18.

Every document that is presented to the Registry must carry a copy. The registry shall keep the copies in order in the corresponding indexes, whether physically or by means of magnetic, optical or any other records that it deems convenient.

Foreign companies legally incorporated abroad that wish to establish themselves in the country or to have branches or agencies therein must apply to the Mercantile Registry, the sole body in charge of granting the respective authorization.

With the application for authorization, the documentation required by article 215 of this Code shall be presented.

Once the requirements demanded by article 341 of this Code are fulfilled and the publication is made without opposition having been filed, the Registrar, after verification of the effectiveness of the capital allocated to its operations and of the establishment of the surety, shall make the definitive registration, whose effects shall be retroactive to the date of the provisional registration, and shall issue the corresponding Commercial License.

For the registration of the companies to which article 221 refers, it shall only be necessary to publish a notice in the Official Gazette and in another of those with the largest circulation, which shall contain the same requirements of the notices established in article 341, and the respective application shall be brought to the knowledge of the Public Prosecutor's Office.

The authorization for any foreign company to operate in the country shall expire if the company does not begin its operations within a period of one year counted from the date of the provisional registration.

Without prejudice to the other sanctions established by this Code, the failure to register and the breach of any of the obligations established by the same Code for merchants shall be sanctioned with a fine of twenty-five to one thousand quetzales, which shall be imposed by the registrar.

No Chamber or Trade Association may register any merchant, as long as the merchant does not prove his registration in the Mercantile Registry.

Only registered merchants may hold trusteeships in bankruptcies and avail themselves of the benefit of suspension of payments.

The registrars shall issue the certifications requested from them, judicially or extrajudicially in writing, about what appears in the Registry. Such certifications shall be issued without any summons.

The provisions of the Civil Code relating to the Property Registry are applicable to the Mercantile Registry, insofar as relevant.

All enterprises are obliged to contract with anyone who requests the products or services they provide, observing equal treatment among the different categories of consumers.

Any act or fact contrary to commercial good faith or to the normal and honest development of mercantile activities shall be considered unfair competition and, therefore, unjust and prohibited.

The following acts, among others, are declared to be unfair competition:

1.Deceiving or confusing the general public or determined persons, by means of:

a)The bribery of the client's employees to mislead it about the services or products of the supplier.

b)The use of false indications about the origin or quality of the products or services, or the false mention of honors, awards or distinctions obtained by them.

c)The use of the usual means of identification to attribute the appearance of genuine products to spurious products, or to the carrying out of any falsification, adulteration or imitation pursuing the same effect.

d)The spreading of false news, capable of influencing the buyer's purpose, about the reasons the seller has for offering special conditions, such as announcing sales arising from liquidations, bankruptcies or insolvency proceedings, when those situations do not really exist.

Merchandise bought in a bankruptcy, insolvency proceeding or liquidation may only be resold with announcement of that circumstance.

Only those sales resulting from the winding up of the enterprise, the closing of an establishment or branch, or the termination of activities in one of the lines of business of the enterprise in question may be advertised as liquidation sales.

2.Directly harming another merchant, without infringing contractual duties toward him, by means of:

a)Improper use or imitation of trade names, emblems, samples, notices, trademarks, patents or other elements of an enterprise or of its establishments;

b)Spreading news capable of discrediting the products or services of another enterprise;

c)Bribery of the employees of another merchant in order to cause him losses;

d)Obstructing the access of the clientele to the establishment of another merchant.

e)Direct and public comparison of the quality and the prices of one's own merchandise or services with those of other merchants designated by name or in a manner that makes their identity notorious.

3.Directly harming another merchant through breach of contracts, as occurs:

a)When using the name or the services of a person who has undertaken not to devote himself, for a certain time, to a determined activity or enterprise, if the contract was duly registered in the Mercantile Registry corresponding to the place or region in which it must have effect;

b)When taking advantage of the services of a person who has broken his employment contract at the direct invitation of the merchant who gives him new employment.

4.Carrying out any other similar acts, aimed directly or indirectly at diverting the clientele of another merchant.

The action for unfair competition may be brought in ordinary proceedings by any aggrieved party, the respective trade association or the Public Prosecutor's Office.

The decision that declares the existence of acts of unfair competition shall order the suspension of those acts, the measures necessary to prevent their consequences and to avoid their repetition, and compensation for damages when appropriate.

In the case that it is determined that the acts of unfair competition were carried out through intent (dolo) or negligence (culpa) of the infringer, the tribunal may order the publication of the judgment at the expense of the infringer.

The repetition of the same acts of unfair competition, after the final judgment that orders their suspension, is presumed to have been committed with intent, without admitting evidence to the contrary.

Once the action for unfair competition has been brought, the judge may order the precautionary measures that he deems opportune to adequately protect the rights of the consuming public and of the competitors, provided the plaintiff grants the proper guarantee. Those measures may consist of the preventive seizure of the infringing merchandise, the suspension of the acts that have given rise to the action, or the return of things to the state they were in before the acts of unfair competition were carried out.

Merchants are obliged to keep their accounting in an organized manner, in accordance with the double-entry system and using generally accepted accounting principles.

For that purpose they shall keep the following books or records: 1.- Inventories; 2.- First entry or journal; 3.- Ledger or centralizing book; 4.- Financial Statements.

In addition, they may use the others that they deem necessary due to accounting or administrative requirements or by virtue of other special laws.

They may also keep their accounting by mechanized procedures, on loose sheets, cards or by any other system, provided that it allows their analysis and auditing.

Merchants that have total assets not exceeding twenty-five thousand quetzales (Q. 25,000.00) may omit from their accounting the books or records enumerated above, except those required by special laws.

The books and records must be kept in Spanish and the accounts in national currency.

Branches and agencies of enterprises whose head office is abroad may keep a duplicate in the language and currency they wish, with a column that includes the conversion to national currency, after prior notice to the mercantile registrar.

Infringement of the provisions of the preceding article, as well as of what is determined in article 368 of this Code, shall cause the entrepreneur to incur a fine of not less than one hundred quetzales nor more than one thousand, in each case. The Mercantile Registry shall impose the aforementioned fines and must require compliance with this article, and may judicially compel the translation, conversion and correction, as the case may be, at the expense of the infringer.

Merchants shall keep their accounting themselves or through a different person expressly or tacitly designated, at the place where the enterprise has its domicile or where the taxpayer has his tax domicile, unless the mercantile registrar authorizes keeping it at a different place within the country. However, those individual merchants whose total assets exceed twenty thousand quetzales (Q. 20,000.00), and every mercantile company, are obliged to keep their accounting through Accountants.

The books required by tax laws must be kept at the tax domicile of the taxpayer or at the office of the accountant of the taxpayer who is duly registered with the Directorate General of Internal Revenue.

The inventory and first entry or journal books, the ledger or centralizing book and the financial statements book must be authorized by the Mercantile Registry.

Merchants must keep their accounting with truthfulness and clarity, in chronological order, without blank spaces, interpolations, erasures or crossings out. The books must not show signs of having been altered, by substituting or removing folios or in any other manner.

The errors or omissions incurred when operating in the books or records shall be corrected immediately after they are noticed, explaining clearly what they consist of and extending or completing the entry, as it should have been written.

The merchant must establish, both at the start of his operations and at least once a year, the financial situation of his enterprise, through the balance sheet and the profit and loss statement, which must be signed by the merchant and the accountant.

It is prohibited to keep more than one set of accounts for the same enterprise. Infringement of this prohibition is cause for none of the sets of accounts to serve as evidence, without prejudice to the other liabilities to which there may be occasion.

Merchants, their heirs or successors, shall preserve the books or records of the general operations of their enterprise for all the time that it lasts and until the liquidation of all its businesses and mercantile dependencies.

The book or record of financial statements shall contain:

1.The opening balance sheet and the ordinary and extraordinary ones that are prepared for any circumstance.

2.The profit and loss statements or those that take their place, corresponding to the balance sheet in question.

3.Any other statement that, in the judgment of the merchant, is necessary to show his financial situation.

The merchant may keep the auxiliary books or records that he deems necessary.

The balance sheet must express with truthfulness and in a reasonable form the financial situation of the merchant and the results of his operations up to the date in question.

Every mercantile company and the foreign companies authorized to operate in the Republic must publish their balance sheet in the Official Gazette at the close of the operations of each accounting period, complying for that purpose with the requirements established by other laws.

Every accounting operation must be duly substantiated with reliable documents that meet the legal requirements, and lack of substantiation shall be admitted only in the entries relating to mere adjustments, transfer of balances, postings from one book to another or rectifications.

Every merchant must preserve, in an orderly and organized manner, for not less than five years, the documents of his enterprise, except as provided by other special laws.

The documents that concern especially determined acts or negotiations may be rendered useless or destroyed after the time of prescription of the actions that derive from them.

If there is any pending question that refers to them directly or indirectly, they must be preserved until its conclusion.

The system of filing and safekeeping of securities, correspondence and other documents of the operations of his enterprise is left to the discretion of the merchant.