Legal Problems between Business Partners Can be Resolved with Mediation Tools in Costa Rica

    It is important that Tico companies have a shareholders agreement, real statutes and good advice to understand how to apply corporate governance

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    The two types of companies most used in Costa Rica are the Public Limited Company and the Limited Liability Company. In the first, the owners are known as shareholders and in the second, as partners.

    These people or companies become partners in two ways: either from the incorporation of the company, where each one agrees to contribute capital in the new company (or it can also be through assets or contributions in kind); Or, they can acquire the category of partners in a company that is already going on because they bought shares or quotas.

    Legal problems often arise when the company does not have good corporate governance and the rules are not defined from the beginning. For example, when one contributes more money than another, when one passes away and his successors are now part of the company, when a partner agrees to work on something specific, but does not do so and it becomes difficult to get him out of business, or even when a partner uses the company for personal purposes and not for the common good.

    How to act in case of contract breaches

    If any partner defaults on their obligation, the immediate response tends to be arguments. However, it is important to remember that there are tools such as mediation or arbitration, prior to having to go to court. The issue with alternative dispute resolutions is that in order for them to be more effective to use, this should be foreseen in the statutes or in private partnership agreements, especially since the route of buying the stake from the problem partner is not always viable.

    The responsibility of each partner will depend on the type of business, but the idea is that the bylaws of the company provide generalities and that in the case of ongoing businesses (operational), there is always a Partners Agreement (known in English as a SHA: Shareholders Agreement). These documents can (and in some cases, should) include the most basic, such as how to choose the Board of Directors, the duty to keep the company sufficiently capitalized so that it can operate, how and how often to request reports and responses from both the Board of Directors and the General Management.

    Avoiding serious problems

    To avoid problems between partners, it is important that the company is established with real viable statutes, and in the case of companies that are underway, that they are well-advised to understand how to apply good corporate governance in the company. Even, depending on the type of business, there are many ways to support the company, from the application of a family protocol, a corporate governance code, a SHA, among others.

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