Uruguay is the latest state in
the region to initiate legislative reforms to
simplify incorporation. In April the House of
Representatives voted unanimously in favor of a
bill entitled “Promotion of Entrepreneurs” (Promoción
de Emprendimientos), which has now been sent to
the Senate for approval. Title II of the bill
provides for the establishment of a simplified
corporation (“SAS”) and, as noted in its
accompanying report, the legislation has been
inspired by the Model Law on the Simplified
Corporation (“Model Law”). Ecuador
is also in the process of drafting legislation
to provide for the SAS and, as was reported
previously, Peru took
similar steps last fall.
In 2017 the OAS General Assembly took note of
the Model Law as approved by the Inter-American
Juridical Committee (CJI) and instructed the
Department of International Law (Secretariat for
Legal Affairs) to disseminate the Model Law as
widely as possible. The General Assembly also
invited states to adopt, in accordance with
their domestic laws and regulatory framework,
those aspects of the Model Law that are in their
interest, with collaborative support from the
Department. In furtherance of that mandate, the
Department requested that each Member State
consider the appointment of a Focal Point for
the Model Law to enable a channel of
communication between the OAS and those offices,
ministries or bodies responsible for the
modernization of corporate legislation and
simplification of business incorporation (Verbal
Note OEA/2.2/27/18). By means of this mechanism,
a network is being established for the effective
dissemination of the Model Law throughout the
hemisphere. To date, six Member States have
appointed a Focal Point, namely, Argentina,
Brazil, Ecuador, Mexico, Paraguay and Peru. The
Department is presently exploring the
possibility of organizing a meeting of Focal
Points this summer.
In response to this growing interest, the
Department of International Law and the
Department of Economic Development are joining
forces to organize, in preparation for the
VII Inter-American Dialogue of High-Level MSME
Authorities that will take place in Chile
in 2021, a virtual meeting to provide states
with the opportunity to continue sharing good
practices and identifying concrete opportunities
for horizontal cooperation. This event, which
will take place in late summer on a date as yet
to be determined, will include presentations by
legal experts on the Model Law and an exchange
of lessons learned among officials from states
that have initiated the reform process.
While the Model Law has as its objective to
simplify incorporation, an effective process for
dissolution is equally important. Accordingly,
the CJI has included the topic of “dissolution
of companies” on its working agenda. Here too,
inputs from the aforementioned Focal Points will
be helpful in addressing the legal needs of
businesses to improve outdated, complex and
costly procedures for dissolving a corporate
enterprise.
The need to simplify business incorporation and
dissolution is beginning to be recognized across
the region, as evidenced by a number of
activities on the topic, such as those
forthcoming in Ecuador and Argentina. In large
measure, this is thanks to the Model Law on
the Simplified Corporation.
» To obtain more information about the
Model Law on the Simplified Corporation,
click on this link
» For the Uruguay Legislation,
click on this link
For further information on this matter, please contact the Department of International Law of the Secretariat for Legal Affairs of the OAS +1 202 370 0743.
