Advance for Future Capitalizations Must Follow Terms Agreed Between the Company and Interested Shareholders (Superintendency of Companies, Office 220-046662 of 2024)

The Superintendency of Companies issued guidance on the advance operation for future capitalizations, reiterating the process involved in establishing an advance for future capitalizations, which may lead to a statutory reform impacting the company’s share capital.

It noted the need to obtain express authorization from the highest corporate body for this operation, determining whether the advance will be revocable or irrevocable, and defining conditions to uphold the principle of equal treatment among shareholders and the right of preemption, if stipulated in the bylaws.

The Superintendency further highlighted that there is no specific statutory provision governing advances for future capitalizations; only the Basic Accounting Circular regulates how to record the operation, depending on whether it was agreed to be revocable or irrevocable.

If irrevocable, the company must issue the shares to the beneficiaries and record the transaction in equity. If revocable, the company may allocate the resources in accordance with the received authorization, recording the transaction as a loan, which may or may not accrue interest.

It also clarified that the company may not unilaterally change the nature of the advance, as it is bound by the terms of the contract and the authorization from the highest corporate body, with potential contractual and administrative liability implications.