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Documentation

Preliminary agreements
What preliminary agreements are commonly drafted?

Confidentiality and non-disclosure agreements are commonly drafted and discussed before any substantial exchange of non-public information. Thereafter, general terms of agreement or a memorandum of understanding is often drafted.

Principal documentation
What documents are required?

The acquisition of shares in a Bolivian corporation requires only the endorsement of shares and registration in the share registry book, followed by registration of the foreign investment with the Central Bank. The transfer of participation in a Bolivian limited liability partnership may require legalised and duly certified translations of the acquirer’s incorporation documents.

Further, regulated entities must file documentation and, in many cases, obtain prior authorisation from the relevant regulator before proceeding with the acquisition.

As a result, the requisite documentation may substantially differ from one transaction and another.

Which side normally prepares the first drafts?

The seller typically prepares the initial drafts of the confidentiality agreement and the initial memorandum of understanding, and the buyer prepares the initial drafts of the acquisition agreement.

What are the substantive clauses that comprise an acquisition agreement?

The substantive clauses will involve transfer of the company, consideration and time to execute the agreements. 

What provisions are made for deal protection?

Break fees may be sought as damages for extra-contractual fault. In such cases, the claimant must show that there was a good-faith negotiation, that certain agreements were reached and that breach of those preliminary agreements caused it damage.

Closing documentation
What documents are normally executed at signing and closing?

Depending on the agreement structure, the documents may vary greatly. That said, they typically include a purchase agreement and transfer of shares. 

Are there formalities for the execution of documents by foreign companies?

Documents must often be notarised and filed before the Registry of Commerce. In such cases, the foreign company’s documents and a power of attorney on behalf of the signatory must be legalised before the Bolivian consulate in the country of origin and in Bolivia before they are signed. 

Are digital signatures binding and enforceable?

Digital signatures are binding and enforceable pursuant to the Telecommunications Law and must comply with the law’s provisions on electronic signatures. 

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