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2-1-1971

The New Commercial Code of GuatemalaS. A. Bayitch

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Recommended CitationS. A. Bayitch, The New Commercial Code of Guatemala, 3 U. Miami Inter-Am. L. Rev. 27 (1971)Available at: http://repository.law.miami.edu/umialr/vol3/iss1/5

GUATEMALA: COMMERCIAL CODE 1970

S. A. BAYITCH*

Initiatives to reform the traditional Latin American commercialcodes or even replace them with new ones have resulted, until recently,in extensive discussions and, here and there, in new drafts.1 However,the awareness of the need for a planned economic development on theone hand, and the impetus from economic integration, on the other, haveadded a note of urgency. It is not surprising, therefore, that starting inthe 1950's these attempts became more serious and, finally, resulted insignificant new codifications in the area of commercial law. One of thesecodes is the one enacted in Guatemala in 1970.

LATIN AMERICAN COMMERCIAL LAW

Latin American commercial 2 law is characterized by three mainfactors. First, it constitutes a separate body of law, both substantive andprocedural, distinct from the general civil law (derecko comturs). Con-sequently, such dualism' unavoidably results in numerous duplications inthe sense that there are in force two sets of laws for the same type oftransactions. Sales contracts, for example, may be governed by generalcivil law or they may be subject to commercial law if they fall withinthe scope of the commercial code, regardless of the fact that some aspectsof the commercial sale may be regulated by general civil law as a sub-sidiary source.

The second characteristic common to Latin American law generally,and to commercial law in particular, is that it is codified in extensivecodes4 which have their particular status in the hierarchy of legal sources. 5

The commercial codes cover various facets of commercial activities, fromthose involving individual merchants or business associations of variouskinds to commercial contracts (particularly sales), maritime law, in-surance, credit operations and bankruptcy.

The third characteristic is that Latin America did not produce com-mercial codes of its own. Instead, Latin American commercial codes are

*Professor of Law Emeritus, University of Miami School of Law

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wholly or partially borrowed from Europe.6 In most instances they fol-low the Napoleonic Commercial Code of 1807. This code was adopted,for example, in Bolivia (1838), Haiti (1826), and in the DominicanRepublic (1884), where the original codes are, with some modifications,still in force. In other republics the Napoleonic Code was adopted in theform of its copy, the Spanish Commercial Code of 1829. This was thecase in Paraguay (1846), Peru (1853), Nicaragua (1869), Honduras(1890) and Puerto Rico (1899); in others it was used as the principalmodel, for example in Venezuela (1867) and in Mexico (1889). Inaddition to the Spanish-French model, some Latin American codes havebeen influenced by other European models outside of the Spanish mother-land. In its Commercial Code of 1850, Brazil followed, for obviousreasons, the Portugese code of 1833 which, in turn, shows strong im.prints of the Napoleonic codification of 1807. More recently, two noveltrends have appeared: one, to fashion commercial codes after othermodels, among them the Italian Commercial Code of 1882 and, lately,the German code of 1900. It is not surprising that such close relationshipwith European codal patterns brought with it an unparalleled influenceof French, Spanish and Italian writers in the field; in some instances,their writing appeared in Latin America in translations with correspond.ing notes referring to local particularities. The other trend is evidencedby an increasing inter-fecundation between Latin American countriesthemselves. One of such codes is the Chilean Commercial Code of 1865. 7

Relying on the French and Spanish codes of 1807 and 1829, respectively,as well as on the Portugese code of 1833 and that of Argentina of 1859,the Chilean code was widely adopted by other Latin American countries,for instance, by Ecuador (1861), Venezuela (1863), Nicaragua (1867),Colombia (1873), El Salvador (1880), Honduras (1880), Panama (1916)and Guatemala (1877) .'

In spite of the proliferation of codifications and the changes thereto,these commercial codes show apparent weaknesses. There is too muchreliance on foreign models. It seems that the drafters preferred to borrowtexts from foreign models rather than to face domestic economic realitiesand seek corresponding legal solutions. The codes are primarily the workof doctrinaires well versed in foreign commercial law but not familiarwith the shops, banks or corporations operating in their own countries.However, profound changes in the economies of Latin America, particu-larly under the pressure of the British and, later, United States economicpenetration, demanded an up-dating of the codes. In most countries, com-mercial codes have been adjusted, at least to some extent, by extensivecollateral legislation which left original codes intact and replaced par-ticularly sensitive chapters, as for example, those on business associations,

THE NEW COMMERCIAL CODE OF GUATEMALA

negotiable instruments, credit institutions and insurance with modernlaws.9 Recently, additional innovations have been introduced into LatinAmerican commercial law. These are new ideas which regard the enter-prise as a basic institution; in some jurisdictions installment sales havebeen introduced and in others monopolies, unfair competition, stock ex-changes, trademarks and modem credit and security arrangements havebeen regulated by statute. In some instances, useful solutions have beenadopted from common law countries regarding, for example, trusts, novelcredit and security transactions as well as negotiable instruments.

A new era in the development of Latin American commercial legisla-tion was initiated with the commercial code enacted in Honduras in 1950.10This code not only abandoned the traditional reliance on the Napoleonicmodel and its derivatives, but adopted significant elements from the SwissCode of Obligations (1889) and the Italian Civil Code (1942), withoutgoing all the way toward unification of civil and commercial law, repre-sented by these two codifications. 1 The next new code was the Commer-cial Code of Costa Rica (1964)12 which remained quite distant from itsHonduran predecessor and, instead, produced significant innovations. In1970 the Guatemalan Commercial Code appeared, the first code which,even though on a regional basis, tends toward legislative unification.Finally, the most recent enactment in this field, the Commercial Code ofEl Salvador (1970)13 was published, to be followed, it is hoped, by thenew Colombian commercial codification'14

THE GUATEMALAN COMMERCIAL CODE OF 1970

The new code went into effect on January 1, 197115 and replaced thecode of 1942,16 with some exceptions to be noted later. As regards or-ganization of the code, it follows closely the Honduran model. Book Ideals with merchants and their auxiliaries; Book II with professional ob-ligations of merchants; Book III with commercial things; and Book IVwith commercial obligations and contracts followed by short proceduralrules and transitory provisions. 17

(1) Coverage. Since Latin American commercial codes generally, andthat of Guatemala in particular, maintain the separation between civil andcommercial law, the question of coverage given to the latter as a specialbody of law becomes crucial. In delimiting their special areas of cover-age, s commercial codes use two criteria, the subjective and the objective.Coverage based on subjective criteria centers on the person of the mer-chant engaged in his professional activities, subjecting to the commercialcode acts performed by him in his profession. On the other band, the

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objective criterion shifts from the person of the merchant, individual orcorporate, to a list of transactions19 which-whether they involve merchantsor non-merchants--are subject to the commercial code. Recently, thismethod was expanded to include an additional criterion, namely that ofmercantile things (cosas mercantiles), the result being that any dealingswith such things will bring the commercial law into operation. Of course,the subjective and the objective systems may be combined into a mixedsystem. This is the system adopted by the Guatemalan code, but with mainreliance on objective criteria.

The code applies, first, to merchants' professional activities, mer.chants being those who in their own name and for profit engage in anyof the following activities: production or transformation industries orservices; intermediary functions in the marketing of goods or services;and in banking, insurance and guaranty as well as in auxiliary functions(Art. 2). Business associations regulated by the code are considered mer-chants by operation of law, regardless of their particular activity (Art. 3).However, excluded are the liberal professions, agricultural activities andartisans who work only on order and have no inventory or a shop for thesale of their products (Art. 9).

Second, the code covers, regardless of the mercantile or non-mercan-tile characters of the participants, all transactions which involve mercan-tile things, a criterion suggested by the Mexican drafts of 1927 and1943.20 These transactions -include negotiable instruments, commercialenterprises and patents, models, trademarks and similar matters (Art. 4).In cases where the mercantile quality of participants is a factor, the codewill apply even if non-merchants are involved in such "mixed transaction"(Art. 5). However, it is not clear whether dealings in land are excludedfrom the code, a discrimination dating from feudal times. It would seemthat they are not.21

(2) Sources of commercial law. The Commercial Code as the primarysource of commercial law is supplemented (Arts. 1, 694) by the CivilCode (1963).22 However, the latter's application in commercial mattersis modified since, according to Art. 1, the Civil Code should be "inter-preted in accordance with the principles inspired by commercial law."But, a few provisions of the Civil Code have been expressly retained (Arts.IV and V of the modifying provisions) while others have been expresslyrepealed inasmuch as the matters covered therein are now regulated bythe Commercial Code as, for example, trusts, editing and related contracts,lodging and transportation. As already stated, the Commercial Code of1942 has been superseded except for the provisions dealing with mari-time law contained in Book IIl, Titles I to VI and VIII. These matters are

THE NEW COMMERCIAL CODE OF GUATEMALA

being reserved for future codification in accordance with the planned uni-form Central American maritime code.2 3

It may be noted that the present Code eliminated commercial customsas one of the traditional sources of commercial law.2 4

Judicial proceedings involving matters within the scope of the com-mercial code are regulated by the Code of Civil and Commercial Proce-dure (1964) ;25 the summary procedure will apply (Art. 1039), unless theparties have agreed on conciliation or arbitration (Arts. 671, para. 2 and1039) .26

(3) Conflict of laws. The new commercial code has but scattered choice-of-laws rules. There are provisions dealing with foreign merchants andforeign business associations to be summarized later.27 In regard to for-eign business associations the code provides (Art. 220, para. 2) that the"acts, contracts and dealings related to their activities are subject to andgoverned by the laws of the Republic." With regard to contracts gen-erally, the code deals only with one aspect, namely that of form, providing(Art. 671) that "contracts concluded in Guatemala to take effect there,

shall be in Spanish." There is no provision for non-compliance with thisprecept. A rather significant rule appears in Art. 798, dealing with trans-portation by land, water and air. It provides that "whenever a combinedtransport (i.e., a transport undertaken by two or more carriers) started andended outside of Guatemalan territory, the carriers domiciled in Guatemalaare liable only within the limitations set by Guatemalan laws and respondonly in Guatemalan courts."

These few provisions are to be implemented by conflict rules con-tained in the Law on Judicial Administration (Decree No. 1762, 1968). 28

(4) Merchants. Merchants29 as defined in the new commercial codeare persons engaged in the commercial activities listed in Art. 2; alsobusiness associations enumerated in Art. 10, regardless of the nature oftheir activities (Art. 3). Merchants are subject to a number of dutiesimposed upon them by the code. One of them is to register (Art. 332) inthe proper mercantile registers (Art. 333). These consist of a numberof books each serving a particular purpose. The important books arethose in which individual merchants are inscribed (Art. 335), those forbusiness associations (Art. 337) and those where commercial enterprisesregister (Art. 337). The effect of an inscription is determined by thecode. Acts and documents inscribed or filed take effect vis-ai-vis thirdpersons (Art. 339). Special provisions dealing with foreign business as-sociations (Art. 352-355) will be summarized later.30

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Merchants also are bound to keep books 11 as requested by Art. 368and retain correspondence and other documents for five years (Art. 382).

In addition to these formal duties the code imposes on merchantssignificant substantive obligations. Among these is the obligation to re-frain from monopolistic practices, 32 defined in the code as the duty toprovide equal treatment to all customers (Art. 361), as well as from acts

of unfair competition listed in Art. 363. In the performance of their "ob-ligations and contracts" merchants must conform to principles of truth andgood faith (verdad sabida y buena /l guardada) in order to safeguardproper and honorable intentions and to comply with the intent of the par-ties "without impairing their natural effects by arbitrary interpretation"as provided by Art. 669 under the heading of "philosophic principles."

(5) Business associations. Art. 10 of the code lists five types of asso-ciations: 33 partnerships (sociedad colectiva), 34 limited partnerships(sociedad en comandita simple);35 limited-liability firm (sociedad de res-ponsibildad limitada),36 corporation (sociedad an6nima)37 and limitedpartnership with shares sociedad en comandita por acciones).38 Thecode did not include c0 , s wich appear in some Latin Americancommercial codes nor did it adopt the individual enterprise with limitedliability (empresa individual de responsibilidad limitada),39 introducedby the Commercial Code of Costa Rica of 1964 (Arts. 9-16).40 However,a partial effect is given to the idea in the Guatemalan Code by Art. 661which provides that a writ 6f execution against the owner of an enter-prise will be enforced by intervenci6a of the enterprise (forced administra-

tion thereof) and executed against moneys, credits and the inventory,but without impairment of the normal operation of the business.

Rules regulating business associations are found in two sets: generalprovisions applicable to all types (Arts. 14-58, 203-212, 225-255, and 256-262), and provisions dealing with particular types. Generally speaking,most of these provisions are of the routine type. The scope of this studyprevents treating them in depth and the discussion will bcm limited to afew observations on matters. of special interest.

Rules governing partnerships (Arts. 59-67), limited partnerships(Arts. 68-77) and limited partnerships with shares (Arts. 195-202) followtraditional patterns. The rules applicable to limited liability firms (Arts.78-85) appear patently insufficient. Rules regulating corporations containa few interesting provisions. There are provisions regulating non-monetaryconsiderations for shares (aportes, Arts. 91-94); participation of pro-moters (jundadores, Arts. 95-98) ;41 cumulative voting (Art. 115), andshareholder's actions (Arts. 136, 174 and 175).4Z General provisions deal-

THE NEW COMMERCIAL CODE OF GUATEMALA

ing with increase and reduction of capital (Arts. 203-212), with dissolu-tion43 and liquidation (Arts. 225.255) and with merger and transformation(Arts. 256-262) in the case of corporations are provided for in the rulesapplicable to business associations generally.

(6) Auxiliary organs. Merchants, individually or organized as associa-tions, may conduct their business with the help of certain types ofauxiliaries. Auxiliaries are considered merchants (Art. 2) and are regulatedby additional rules in the code (Arts. 263-331). These auxiliaries includefactors who are defined as persons who "manage an enterprise or anestablishment." In fact, factors are general agents similar to the Prokurists

of the German commercial law and a far cry from factors as understoodin this country. The main problem arising with this type of agent is theextent of his powers (Art. 267), the corresponding liability of his prin-cipals (Art. 268) and the validity of his acts. In any event, limitationson the powers granted the factor, if below those vested in him by opera.tion of law, must appear in the commercial register to be effective againstthird persons (Art. 266). Another type of auxiliary organ is the com-mercial agent, who may act in a dependent or independent capacity(Art. 280). A third type is the broker (Art. 292-302). Finally, thereis the commission agent who engages in commercial activities on theprincipals' account (Arts. 303-331).

(7) Mercantile things. Mercantile things include three types of assetspertaining to business: negotiable instruments (Arts. 385-654), mercantileenterprises (Arts. 655-667), and patents and trademarks (Art. 668).

Provisions dealing with negotiable instruments (titulos de cridito)"appear in two sets: in the general provisions (Arts. 385-414) and inprovisions dealing with particular types. Letters of exchanges are regulatedin Arts. 441-493, and checks in Arts. 494-500, with added provisions forsome particular kinds as, for example, crossed checks (Arts. 517.520),checks drawn on an account (Arts. 521-523), certified checks (Arts. 524-529), guaranteed checks (Arts. 530-532), cashier's checks (Arts. 533-534), travellers' checks (Arts. 535-541)46 and checks with a form forreceipt attached (Arts. 542-543). Additional chapters deal with bondsand obligations (Arts. 544-583), warehouse certificates (Arts. 584-587),bills of lading and connaissements (Arts. 588-590) and the jactura cam-biaria (Arts. 591-604), i.e., a negotiable instrument issued in commercialsales by the seller to the buyer for the unpaid amount of the purchaseprice (Art. 591). Additional provisions deal with mortgage bonds andother types of certificates (Arts. 605-606). The chapter of the codedealing with negotiable instruments concludes with procedural provisions:

LAWYER OF THE AMERICAS

actions on letters of exchange (Arts. 615-629), their enforcement (Arts.630-631), and rules regulating cancellation, repossession (Art. 632) andrecovery (reivindicaci6n, Art. 654).

The second mercantile thing, the enterprise, 47 is defined as a unitconsisting of work, material and immaterial assets which, when co-ordinated, offers goods or services to the public for profit and in asystematic way (Art. 655). The code only covers problems arising fromdealing with enterprises, mainly their transfer (Art. 656) 41 and its effecton parties to such contracts and liabilities connected with the enterprise(Arts. 658-660); with execution (attachment) against the enterprise, al-ready mentioned (Art. 661); the cessation of its activities (Art. 662);the duty not to compete, imposed on the seller (Art. 663), and usufructor leases involving enterprises (Art. 664).

The third kind of mercantile thing, trademarks and patents (Art.668) are regulated by special laws.

(8) Commercial obligations and contracts. The final book (IV) ofthe code is devoted to commercial obligations and contracts (Arts. 669-1038). These provisions are prefaced by general provisions, among them

those dealing with adhesion contracts (contratos mediante formularios,Art. 672); p6lizas (Art. 673). Particular rules apply to sales (Arts. 695-706), with rules for FOB, FAS, and CIF; contracts involving periodicalor continuous deliveries of goods or services (contratos de suministro,

Arts. 707-712); and bailments (Arts. 714-741). The extensive chapter oncredit operations (Arts. 718-765) deals with opening of credit (Arts. 718-728), discount (Arts. 727-733), current account (Arts. 734-743), alsowith credit cards (Art. 757). 49 Included in this book are trusts (Jidei-comiso, Arts. 766.793) in view of the rule that only domestic banks maybe trustees (Art. 768). There follows a chapter on contracts of transporta-tion (Arts. 794-823), both of persons and goods, including liabilitiesimposed on carriers.5" The following chapter regulates publishing con-tracts relating to literary, scientific and artistic works and the reproduc.tion and execution of such works (Arts. 824-851), and contracts relatingto broadcasting and the performing arts (Arts. 852-860). A short chaptercontains provisions on joint ventures (contratos de participacidn, Arts.861-865) and another which deals with lodging (hospedaie, Arts. 866-873). The last chapter deals with insurance: liability (Arts. 919-955),life (Arts. 996-1019), reinsurance (Arts. 1020-1023) and surety (Arts.1024-1038).

(9) Status of foreign business. The code contains provisions applicableto foreign individual merchants as well as to foreign business associations.51

THE NEW COMMERCIAL CODE OF GUATEMALA

With regard to the former, the code allows them to engage in business,provided they are local residents and have obtained the necessary ad-ministrative permit (Art. 8).

Business associations established abroad but which have their ad.ministrative seat (sede de su administraci6n) or the principal object oftheir business (objeto principal de la empresa, Art. 213) in Guatemala,are subject to the regulations of the code, including those which affectthe requirements for the validity of their charter, a surprising provision,out of step with standards adopted in international law52 and includedin most treaties of friendship and commerce. Only the form of the chartershall be governed by the country of origin, i.e., registration (Art. 213).Prohibited from operating in Guatemala are foreign business associationsoffering professional services for which properly recognized academicdegrees are required (Arts. 213, para. 2).

Another way to engage in business in Guatemala is through agenciesor subsidiaries. Without defining either term, the code requires that inboth instances such agencies or subsidiaries must maintain a representa-tive in Guatemala (Art. 214) who must have sufficient authority for theperformance of all legal acts and dealings in the respective line ofbusiness, and who will be able to represent the association in and outof court as required by applicable laws. In case a representative shouldlack such powers, he will be, nevertheless, considered to be so authorizedby operation of law. In addition to having such representative, foreignbusiness associations must meet a number of additional requirements:they must prove that they are legally established abroad and file a copyof such document, including the approval by the competent authority;they must set up a capital assigned to local operations and promise to beliable for local acts and dealings, not only with assets held locally butalso with assets located abroad; they must agree to be amenable to localjurisdiction and to be bound by local laws in regard to acts and dealingswhich may take place in Guatemala or may have effect there. In addi.tion, foreign associations must file a declaration that neither the associa.tion nor its representatives or employees will invoke alienage (derechos deextranjerfa), but "enjoy only the rights and the way to exercise themas these are available to Guatemalans under the laws of the land."sSForeign business associations must, moreover, promise to respect legalprovisions regulating their leaving the country, as provided by Art. 217.Finally, they must submit a certified copy of their last balance sheet(Arts. 215, 1-8).

In case a foreign business association operates in Guatemala regu.larly (habitualmente) without having complied with the requirements

LAWYER OF THE AMERICAS

set forth above, its representatives or agents will be liable fully and

jointly with such association for "obligations entered into" (Art. 217).

A rule dealing with the bankruptcy of a foreign business association in

the country of its registration (Art. 219) 54 is followed by a list of

operations on the part of foreign business associations which do not

necessitate local permits (Art. 220).55 A special permit is available to

associations which intend to operate locally less than two years (Art. 221).

Foreign business associations must register in the proper commercial

register located in the capital (Art. 352). The office of the registry willrefer the matter to the Ministry of the Interior (Ministerio de Goberna-

cidn) which will issue or deny the permit. Once such a permit is issued,

the registry will proceed with the proper inscriptions (Art. 353). The

permit will expire unless the association starts operations within one year

(Art. 355).

It may be added that subsidiaries and agencies of foreign business

associations whose enterprise is located abroad, may keep a double set

of books. In addition to the one required by the code, a second set may

be kept in their native language and currency with an additional column

showing the sums in the national currency; this fact must be notifiedto the commercial registry (Art. 369).

Finally, it is worth noting that even non-domiciled aliens, individualsand associations, may participate in any type of Guatemalan business

association as partners or shareholders, except where there are provisionsto the contrary in the code or in special laws (Art. 19, para. 2).

CONCLUSIONS

The new Guatemalan Commercial Code represents a significant de.

velopment in Latin American commercial law. It has met, to a considerabledegree, the goals expressed in the considerandos, namely the develop-

mental needs56 of the country. In a spirit, both modern and realistic, it

regulates a free enterprise economy with just and necessary controls. In

doing so it adopts modern institutions in harmony with other countriesof Central America.

FOOTNOTES

IBarrera Graf, El Derecho Mercantil en Ia Ararica Latina 53 (Mexico, 1963).

2SoI Cafiizares, Tratado de Derecho Mercantil Comparado (Barcelona, 1963);Morelli, Concepto de Derecho Mercantil, (2) Revista de Ciencias Juridicas (Costa

THE NEW COMMERCIAL CODE OF GUATEMALA

Rica) 13 (1963). For additional bibliography Bayitch, Latin America and theCaribbean: a Bibliographical Guide to Works in English 48 (1967).

3Register, The Dual System of Civil and Commercial Law, 61 U. Pa. L. Rev.240 (1912); Aztiria, Commercial Law and Private Law in Countries Having aContinental Legal System, 1 Int.-Am. L. Rev. 123 (1959).

4 Olavarria, Los C6digos de Comercio Latinoamericanos (Santiago, 1961).

SBayitch, Codification in Modern Times, in Yiannopoulos (ed.), Civil Law inthe Modem World, 161, 166 (1965), also La Codificaci6n en el Derecho Civil y enCommon Law, 3 Boletin Mexicano de Derecho Comparado (1970).

6Barrera Graf, El Derecho Mercantil en ]a Am6rica Latina 26 (1963).7Olavarria, Manual de Derecho Comercial 80 (Barcelona, 1970).

STranslated in 9 Scrutton (ed.), The Commercial Laws of the World (n.d.);Informe de la Comisi6n Codificadora . . . . 1877, 4(3-4) Revista de la Facultad deCiencias Juridicas y Sociales de Guatemala 348 (1941); Urruela, Breve ResefiaHist6rica del Derecho Mercantil Guatemalteco, 2(3) Revista de Is Facultad deCiencias Juridicas y Sociales de Guatemala 390 (1939); also Watson, LeyesMercantiles y Maritimas de Amirica Latina (Washington, D.C., 1907), 5 v., passim.

9Barrera Graf, El Derecho Mercantil en ]a America Latina 63 (1963).

t0Olavarria, Honduras: a New Code of Commerce, 2 Am. J. Comp. L. 66(1953); Ramirez, Los Sistemas Legislativos en el C6digo de Comercio de Hondurasy en el Proyecto de C6digo de Comercio de El Salvador, (1-2) Boletin del InstitutoCentroamericano de Derecho Comparado 91 (1963).

lSatanowsky, Unificaci6n del Derecho de las Obligaciones y Contratos Civilesy Comerciales, 1 Estudios de Derecho Comercial 181 (Buenos Aires 1950).

2Diario Oficial No. 119 (alcaace No. 27), May 27 (1964); Valle Peralta &Zureher Acufia, C6digo de Comercio y Sus Reformas (San Josi, 1967).

13228 Diario Oficial No. 140, July 31, 1970; for a summary see Bayitch, Inter-American Legal Developments, in this issue. For background Lara Velado, Intro-ducci6n al Estudio del Derecho Mercantil (San Salvador, 1969).

14 Bayiteh, Inter-American Legal Developments, 2 Law. Am. 400, 409 (1970).

15 Bayitch, Inter-American Legal Developments, 2 Law. Am. 200, 216, and 400,414 (1970). Exposici6n de Motivos del Proyeeto de Decreto appears in 17 (2)Boletin del Colegio de Abogados de Guatemala 4 (1969).

16 Ciceres Lars, The Commercial Laws of Guatemala, 2 Digest of CommercialLaws of the World (1967); G6mez Robles, A Statement of the Laws of Guatemalain Matters Affecting Business 26 (1959).

t7 Ramirez, Contenido del Derecho Mercantil Centroamericano, (1-2) Boletindel Instituto Centroamericano de Derecho Comparado 67 (1963).

t sBarrera Graf, Sujetos del Derecho Mercantil, 43 Revista de Derecho Mercantil7 (1967).

19Barker, The Mercantile Act . . . , 6 So. Cal. L. Rev. 1 (1932); Goldschmidt,

Actos de Comercio, in Estudios de Derecho Comparado 447 (Caracas, 1968).201 Rodriguez Rodriguez, Curso de Derecho Mercantil 413 (Mexico, 1964).

21Special laws, supplemented by the Commercial Code, apply to banks, in-surance and similar institutions, exchanges, mutual institutions and others (Art. 12);

LAWYER OF THE AMERICAS

the state and related public institutions (entidades descentralizadas: autdnomas ysemiautdnomas, municipalidades and other public institutions) are not merchants;nevertheless they may engage in commercial activities and thus make themselvesamenable to the Code, except where there are laws to the contrary (Art. 13).

22C6digo Civil, 168 El Guatemalteco No. 84 ss. (1963).

23 lProyceto para el C6digo Maritimo Centroamericano, 6(7-8) Revista de laFacultad de Ciencias Juridicas y Sociales de Guatemala 107 (1959).

24SoIS Cafizares, Tratado de Derecho Comercial Comparado 255 (1963).

2SC6digo Procesal Civil y Mercantil (Decreto-Ley No. 107, 1963); text in 82Recopilaci6n de Leyes de Reptdblica de Guatemala 256 (1966); Murray, The NewCode of Civil Procedure in Guatemala, 7 Int.-Am. L. Rev. 303 (1965).

26Bankruptcy is regulated by the Code of Civil and Mercantile Procedure,book III, chapter 5, arts. 347400; cf. Viiquez Martinez, La Quiebra de lasSociedades Mercantiles, 6(13-14) Revista de la Facultad de Ciencias Juridicas ySociales de Guatemala 101 (1961). A decree (No. 643) entitled General Law ofCooperatives deals with cooperatives.

271nfra (9).

28Bayitch, Inter.American Legal Developments, 1 (1) Law. Am. 50, 58 (1969);Mufioz Meany (a.o.), Derecho Internacional Privado (Guatemala, 1953); VillagrinKramer, Sintesis del Derecho Internacional Privado Positivo de Guatemala, 29Universidad de San Carlos 7 (1954).

29SolI Caflizares, Tratado de Derecho Comercial Comparado 219 (1963).

30Infra (9).

31Everett, Commercial Books in Comparative Jurisprudence, 14 Geo. L. J. 131(1926); Pirez Galliano, Los Libros de Contabilidad Como Medio de Prueba, IRevista de Ia Facultad de Ciencias Juridicas y Sociales de Guatemala 4 (1948).

32Cf. Aftalion, Monopolies, Concentraci6n de Empresas y Sociedades Multi-nacionales, 133 La Ley 1163 (1969).

33Cuevas del Cid, El Capital, los Socios y ]a Administraci6n con Referenciaa las Sociedades Mercantiles en General, 6(5-6) Revista de Ia Facultad de CienciasJuridicas y Sociales de Guatemala 60 (1959); Eder, Company Law in LatinAmerica, 27 Notre Dame Law. 5 (1951); G6mez, A Survey of the Law of LatinAmerican Business Associations, 14 SW.L.J. 169 (1960). For new trends Guyenot,El Nuevo Derecho de Sociedades, 136 La Ley 1453 (1969).

34Gladstone, Theory and Operation of Partnership under the Latin AmericanCodes, 16 Tulane L. Rev. 27 (1941).

3S5Vfsquez Martinez, Las Sociedades en Comandita Simples y por Acciones,

6 (7-8) Revista de Ia Facultad de Ciencias Juridicas y Sociales de Guatemala 75(1959).

36Eder, Limited Liability Firms Abroad, 13 U. Pitt. L Rev. 193 (1952); Vries &Juneger, Limited Liability Contract: the GmhH, 64 Colum. L. Rev. 869 (1964); SoldCafiizares & Aztiria, Tratado de Sociedades de Responsibilidad Limitada en DerechoArgentine y Comparado (Buenos Aires, 1950).

"7Skinner Klie, La Organizaci6n de la Sociedad An6nima en Guatemala(Guatemala, n.d.); Aycinena Banus, La Sociedad An6nima en Centroamirica yPanami 111 (Guatemala, n.d.); Ozores, La Sociedad An6nima, (1-2) Boletin del

THE NEw COMMERCIAL CODE OF GUATEMALA

Instituto Centroamericano de Derecho Comparado 103 (1963); 2 Soli Caftizares,Tratado de Sociedades por Acciones en Derecho Comparado 105 (Buenos Aires,1957).

3t

Vfsquez Martinez, Las Sociedades en Comandita Simples y par Acciones,

6 (7-8) Revista de Ia Facultad de Ciencias Juridicas y Sociales de Guatemala 75(1959); Lobos, Sociedades en Comandita por Acciones: Aigunos Problemas deInteris Prictico, in Estudios en Homenaje al Profesor Leopoldo Melo 243 (BuenosAires, 1956).

39

Aztiria, Limited Liability in Single Partner Enterprises, Int-Am. Bar Asso.,Proceedings of the 10th Conference, Buenos Aires, 1957, at 289 (1958); Ozores,La Empress Individual de Responsibilidad Limitada, (1-2) Boletin del InstitutoCentroamericano de Derecho Comparado 127 (1963); Rava, La Limitaci6n de IaResponsibilidad del Comerciante Individual, 23 Justicia (Mexico) 49 (1963);Rodriguez Olivera, Responsibilidad Limitada del Comerciante, 19 Revista de ]aFacultad de Derecho y Ciencias Sociales (Montevideo) 321 (1968); Grisoli, Socie-dades Unipersonales y Empress Individual de Responsibilidad Limitada, in Libro a]a Memoria de Roberto Goldschmidt 31 (Caracas, 1967); Speth, La Limitationde Is Responsibiliti Commerciale Individuelle: Etude de Droit Compare, 9 RevueInternationale de Droit Compark 27 (1957).

40Also adopted by the Commercial Code of El Salvador (Arts. 600-622, 1970).

4lCrawford, Promoters' Compensation: Domestic and Foreign, 23 U. Cinc. L.

Rev. 1 (1954).

42SoIl Cafiizares, The Rights of Shareholders, 2 Int'l & Comp. L. Q. 364 (1953).

43Sagastune Vidaurre, Disolucidn de Sociedades, 6 (13-14) Revista de ]a Facultad

de Ciencias Juridicas y Sociales de Guatemala 138 (1961).

4 4Gutiirrez, Nociones Generales sbre Titulos Valores (3-4) Boletin del Instituto

Centroamericano de Derecho Comparado 211 (1964).4SMolina Abril, Letra de Cambio, 6 (5-6) Revista de Ia Facultad de Ciencias

Juridicas y Sociales de Guatemala 83 (1959); Ozores, El Cheque Centroamericano,(5-6) Boletin del Instituto Centroamericano de Derecho Comparado 171 (1966).The Hague Convention of 1910 on negotiable instruments adopted in Guatemalaby decree No. 874 (May 30, 1913) will he superseded by the respective provisionsof the new Code; consequently, the Convention will be denounced (Art. III of thedisposiciones derogatorias y modilicatorias of the Code).

46Winizky, Cheque Viajero, in Estudio en Homenaje al Profesor Leopoldo Melo

385 (1956).4 7

Ramirez, La Empresa y los Sistemas Legislativos del Derecho Mercantil,(1-2) Boletin del Instituto Centroamericano de Derecho Comparado 79 (1963);GonzAles Polo, La Empress y ]a Hacienda Mercantil (M6xico, 1955); Stanovsky,Nature Juridique de l'Entreprise et du Fonds de Commerce, 7 Revue Internationale

de Droit Compark 726 (1955); same, Empress y Hacienda Comercial: su NaturalezaJuridica, in Estudios en Homenaje al Profesor Leopoldo Melo 95 (1956); MatusValencia, La Empress coma Sujeto de Derecho Moderno, 19 Revista de Ia Facultadde Derecho y Ciencias Sociales (Montevideo) 275 (1968); Pirez Fontana, La Em.presa y el Derecho Comercial, ibid. 303; Ferrara, Teoria Juridica de Ia HaciendaMercantil (tr., Madrid, 1950); Pardes, Le Status Juridique de l'Entreprise en DroitComparE, 43 Revue de Droit International et de Droit Compar 145 (1966); Casa-nova, Estudios sohre la Teoria de la Hacienda Mercantil (tr., Madrid, n.d);Guti~rrez, Sociedad y Empress, (11) Revista de Ciencias Juridicas (Costa Rica)

LAWYER OF THE AMERICAS

243 (1968); Fueyo Laneri, Iniciaci6n a Is Bibliografla, Especialmente Hispano-americana, en Torno a] Tema de Ia Empresa, 16 Revista de la Facultad de Derechoy Ciencias Sociales (Montevideo) 521 (1968).

4 RBayitch, Transfer of Business: a Comparative Study, 6 Am. J. Comp. L. 284(1957), expanded in La Transmisi6n de Negocios . . . .12(34) Boletin del Institutode Derecho Comparado de Mixico 11 (1959).

49 Ramirez, Las Tendencias Contempordneas del Derecho Bancario en AmfricaLatina, (3-4) Boletin del Instituto Centroamericano de Derecho Comparado 247(1964).

50Summarized supra (3).5 tJuncadella, Establishing Branches of Foreign Corporations in Central America,

Panama and British Honduras, 1(2) Law. Am. 21 (1969).52 lnter-American Convention on Private International Law (C6digo Bustamante,

Havana, 1928), art. 33; Declaration signed in Washington on June 25, 1936 (T.S.No. 973, also 7 Hudson, International Legislation 355, 1941).

53 Calvo Clause, see Bayitch-Siqueiros, Conflict of Laws: Mexico and the UnitedStates, a Bilateral Study 76 (1968).

54Bankruptcy must be notified to the mercantile registry which shall takenecessary steps to protect local interests, including providencias cautelares on thepart of the administrative and judicial authorities.

5STo appear in judicial or administrative proceedings; maintain accounts inlocal authorized banks; buy and sell through an independent commercial agentpropertly established; handle orders provided they will be confirmed outside ofGuatemala; grant loans to local business; issue, endorse and protest negotiableinstruments; and acquire movable and immovable property provided they are notpart of an Vnterprise or business regularly conducted in the country. In any case,such activities are subject to Guatemalan laws (Art. 220, para. 2).

56Hoy, A Review of Development Planning in Guatemala, 12 J. Int.-Am. Studiesand World Affairs 217 (1970).