Reform to the Costa Rican Commercial Code: Changes in the Representation of Shareholders in Corporate Meetings
Costa Rica Commercial Code reform introduces relevant changes to shareholder and partner representation in corporate meetings.
Costa Rica Commercial Code reform and its impact on corporate meetings
The Law No. 10840 – Law for the Harmonization of the Commercial Code and the Strengthening of the Special Power of Attorney was recently published in the Official Gazette (La Gaceta). This reform introduces relevant adjustments to the way shareholders or partners may be represented in corporate meetings in Costa Rica.
This reform amends Articles 98 and 146 of the Commercial Code, which regulate the exercise of voting rights in shareholders’ and partners’ meetings.
The most relevant change: the practical elimination of the power letter
Traditionally, many companies in Costa Rica used power letters (cartas poder) as a mechanism allowing a third party to represent a shareholder or partner in a corporate meeting.
With this reform, the legislation reinforces the requirement to use formal powers of attorney, which in practice results in the elimination of the use of informal power letters as a mechanism of corporate representation.
Following this modification, partners or shareholders may participate in meetings:
- Personally, or
- Through a representative holding a special, general, or general power of attorney.
This change aims to provide greater legal certainty and clarity in the representation of corporate decision-making processes.
Requirements for a special mandate for a specific meeting
The reform also introduces the possibility of granting a special mandate for a specific meeting, provided the document meets certain formal requirements, including:
- Being issued in writing
- Including the corresponding legal stamps
- Being signed by the principal
- Having the signature authenticated by a lawyer
This power allows a third party—whether a shareholder or not—to attend the meeting and exercise the corresponding voting rights.
What happens if the power of attorney is signed abroad?
When this special power of attorney is granted outside Costa Rica, it must be authenticated by the competent authority in the jurisdiction where the document is signed.
The reform does not expressly address the requirement of apostille or legalization, which creates a regulatory gap in this regard. However, applying complementary legal norms, it is reasonable to interpret that the document must be apostilled or legalized in order to produce legal effects in Costa Rica.
A change that impacts corporate practice
Although this amendment may appear technical, it has significant implications for the day-to-day operations of companies:
- Greater formality in representation during corporate meetings
- Elimination of informal power letters
- Increased legal certainty in corporate resolutions
Final reflection
Corporate law reforms are often subtle, but they generate meaningful changes in the way companies make decisions and document their corporate governance.
At GLC, we closely monitor these regulatory developments and analyze each case individually to determine the most efficient way to comply with the current legal framework, identifying alternatives that simplify procedures while maintaining legal certainty.
If your company uses representation mechanisms in corporate meetings or has shareholders located abroad, we can assist you in evaluating the most appropriate structure to comply with this new regulation. You may also explore our Business Law services, read more in our Commercial Law blog, or contact us for specific legal guidance.
For official and external reference, you may review Law No. 10840 at the Legislative Assembly and the Costa Rican Commercial Code.
