Under the rules of the Venezuelan Code of Commerce, if a company’s net worth is equal to or less than two-thirds but more than one-third of its stated capital, the management of the company is required to call a meeting of the shareholders to consider whether to
(a) liquidate the company, (b) reduce the stated capital to the existing equity, (c) replenish the stated capital, or (d) take none of the foregoing actions. When the company’s net worth is equal to or less than one-third of its stated capital, the company must be liquidated, unless a shareholders’ meeting determines to (a) reduce the stated capital to the existing equity, or (b) replenish the stated capital.
The management of a company that consistently fails to call a meeting of shareholders to deal with the company’s capital losses may risk criminal prosecution for negligent and even fraudulent bankruptcy.
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