On November 19, Ecuadorian President Lenín Moreno sent the National Assembly a partial veto to the draft bill to Modernize the Companies Law. The new measures propose that the State be in charge of promoting competition, dispensing with “monopolistic practices, abuses due to market dominance, and other unfair competition practices.” It is worth mentioning that the initiative was approved by the Legislature on October 22.
The objections presented by the Executive Power include one against the process for foreign companies or legal persons to participate in the capital stock of a national limited liability company. Moreno requested that the idea of subjecting administrators and partners to the arbitration agreement be clarified and suggested that the lifting of the corporate veil be ordered by an arbitral tribunal, regarding intra-corporate conflicts.
Likewise, in the document, Moreno recommended specifying that the shareholders in a public limited company be allowed to include causes of voluntary separation in the bylaws, in order to resolve fundamental disagreements.
Regarding corporate losses, the president proposed that the cause of losses come int play when it is verified that the company is in technical bankruptcy (its net worth is negative) as long as this state of lack of financing lasts for three consecutive financial years.