IBA Guide on Shareholders Agreements

Transcription

1 IBA Guide on Shareholders Agreements PERU Luis Enrique Palacios & Andres Pesaque Rodrigo, Elias & Medrano Abogados 1. Are shareholders agreements frequent in Yes. Shareholders agreements are used virtually in every situation where two or more otherwise unrelated shareholders hold shares in a Peruvian company. 2. What formalities must shareholders agreements comply with in Under Peruvian law, notice to the relevant Peruvian company must be given for a shareholders agreement to be binding on such company. No other formalities are required -. If a provision of a shareholders agreement is inconsistent with the articles of incorporation or bylaws of the relevant Peruvian company then the latter will prevail. However, such inconsistent provision of the shareholders agreement will still be binding upon the parties to the shareholders agreement. 3. Can shareholders agreements be brought to bear against third parties such as purchasers of shares or successors? Other than in respect of the relevant Peruvian company if notice of a shareholders agreement is given to it, shareholders agreements are only binding on third parties if they execute an accession agreement or any other document evidencing their consent to be bound by the shareholders agreement. The mere acquisition of shares of a Peruvian company from a party to a shareholders agreement does not automatically bind the purchaser to such shareholders agreement. 4. Can a shareholders agreement regulate non-company contents? There is no legal provision in Peru preventing the parties to a shareholders agreement from regulating - non-company content in it.. In Peru such noncompany content is not per se void or - unenforceable merely due to the fact that it is regulated in a shareholders agreement. 5. Are there limits on the term of shareholders agreements under the law of

2 No. In Peru shareholders agreements can have a term as long as the parties to it wish or as long as the relevant Peruvian company exists. Under Peruvian law, Peruvian companies may exist for an indefinite period. 6. Are shareholders agreements related to actions by directors valid in Yes. - Shareholders agreements can include provisions governing the actions of directors appointed by, or under the control of, shareholders party to a shareholders agreement. 7. Does the law of Peru permit restrictions on transfer of shares? Yes. Restrictions on the transfer of shares are valid under Peruvian law. However, in the case of publicly traded Peruvian companies any restriction on the transfer of their shares in a shareholders agreement will not be binding on such companies but will be binding upon the parties to the shareholders agreement. In the case of certain non-publicly traded Peruvian companies a restriction on the transfer of their shares can be set forth in a shareholders agreement and even in the bylaws of the companies themselves. 8. What mechanisms does the law of Peru permit for regulating share transfers? Under Peruvian law, it is possible to regulate share transfers by means of, among other mechanisms, (a) absolute prohibitions to transfer or encumber shares (but for a maximum term of 10 years), (b) a certain prior consent required to transfer shares, whether from the Shareholders Meeting of the relevant company itself or otherwise, (c) rights of first refusal, whether for the benefit of other shareholders, the relevant company itself or any third party, (d) call options and put options, and (e) drag along rights and tag along rights. 9. In Peru do bylaws tend to be tailor-drafted, or do they tend to use standard formats? In ordinary situations the bylaws of a Peruvian company tend to follow standard formats, in most cases merely reflecting the minimum mandatory content required under Peruvian law. Tailor-drafted bylaws are possible but, even when merited under the circumstances, it is not unusual to use standard bylaws and leave the desired tailor-drafted regulation to shareholders agreements. 10. What are the motives - for executing shareholders agreements in The motives in Peru are the same as the motives in most jurisdictions, namely protecting through the regulations of a sharehoders agreement the value of an

3 equity investment made. Parties to a shareholders agreement typically seek - such value-protection by having the shareholders agreement cover mechanisms to, among other things, (a) control the corporate bodies of the relevant Peruvian company, (b) limit third parties obtaining an equity interest in the relevant Peruvian company, (c) withdraw, or force the withdrawal of shareholders, from the relevant Peruvian company, (d) remedy deadlock events, and (e) limit the ability of other shareholders to compete with the project or business of the relevant Peruvian company. 11. What contents tend to be included in shareholders agreements in In line with answer to question 10, - shareholders agreements tend to include provisions concerning, among other things, (a) election of members of the Board of Directors and senior executive officers, (b) supermajorities or veto rights for certain decisions of the Shareholders Meeting and the Board of Directors, (c) rules governing capital calls and investment decisions, (d) share transfer restrictions, (e) exit and squeeze-out mechanisms, (f) remedies to deadlock events, and (g) non-compete and non-solicitation undertakings. 12. What determines the content included in shareholders agreements in The contents included in shareholders agreements in Peru will depend on several factors, among them the particular circumstances of the transaction, disparity in negotiating leverage of the parties, the investment amounts involved and the shareholding distribution of the parties. 13. What are the most common types of clauses in shareholders agreements in Please see answer to question What mechanisms does the law of Peru permit to ensure participation of minorities on the board of directors and its control? Peruvian law provides a cumulative vote mechanism for election of members of the Board of Directors of Peruvian companies. In essence -this mechanism affords each share as many votes as members of the Board of Directors are being elected and each shareholder is entitled to accumulate its votes for -one or more candidates. The election of members of the Board of Directors can also be regulated in shareholders agreements. 15. Is it possible in Peru to ensure minority shareholder control by means of a shareholders agreement?

4 Minority shareholders can be given a decisive influence in corporate decisions by including - supermajority voting or veto rights in shareholders agreements. The scope of decisions subject to supermajorities or a veto determines the level of control afforded to minority shareholders. However, in these cases minority shareholders may only prevent the passing of resolutions - but that does not give minority shareholders the power to pass resolutions by themselves. It is not customary in Peru to give minority shareholders control over a company by means of shareholders agreements. 16. What are the usual valuation mechanisms in connection with rights of first refusal or share transfer regulations? In Peru the usual valuation mechanisms can depend on the relevant share transfer restriction. In the case of the sale of shares subject to a right of first refusal, a tag along right or a drag along right, among other share transfer restrictions, determination of the purchase value is generally based on the price offered or accepted by a third party. In the case of put options, call options and buy-sell clauses, the determination of the purchase value is typically based on the relevant Peruvian company s enterprise value. The method- for calculating such value can vary and Peruvian law does not set a preferred method. 17. Is it admissible for a shareholders agreement clause to refer dispute resolution to the courts other than those of Peru and/or under a law other than that of Having a shareholders agreement in respect of a Peruvian company governed by non-peruvian law and subject to non-peruvian jurisdiction is generally possible. However, as everywhere else, foreign law may not be entirely consistent with Peruvian law as applicable to Peruvian companies, which in turn could lead to conflicts between the content of shareholders agreements and the articles of incorporation or bylaws of the relevant company. A choice of foreign law will be valid under Peruvian law except for the limitations of (a) Article 2049 of the Peruvian Civil Code, under which provisions of foreign law shall be excluded if they are incompatible with international public policy or good morals, (b) Article 2088 of the Peruvian Civil Code, under which the creation, content and extinction of security interests on tangible assets located in Peru is governed by Peruvian law, and (c) Article 2.1 of the General Bankruptcy Act under which any insolvency, bankruptcy, moratorium, fraudulent conveyance or transfer involving entities domiciled in Peru shall be ruled by Peruvian law. In any such scenario Peruvian law will apply. The submission to the jurisdiction of a foreign court or of an arbitration panel seated outside Peru will be valid under Peruvian law except for the limitations of Article 2060 of the Peruvian Civil Code, under which such submission shall be denied if the controversy concerns matters subject to the exclusive jurisdiction of Peruvian courts (i.e., in rem rights related to real estate located in Peru, criminal

5 offences in Peru or when the parties have expressly or implicitly submitted to Peruvian jurisdiction), or if such submission would constitute an abuse of law or would contravene Peruvian public policy. 18. Is it admissible for a shareholders agreement to include an arbitration clause with seat outside Peru and/or under a law other than that of Please see answer to question 17.