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Annual Mandatory Meetings and their importance in good corporate governance

February 20, 2026

Articles

In accordance with the provisions of article 114 of the General Companies Act, Act No. 26887, shareholders are required to meet at least once a year within the first three (3) months of the year, with the purpose of adopting, among others, the following agreements: i) Decide on the social management and economic results of the company; ii) Decide on the distribution of profits; iii) choose the Board of Directors and set diets; iv) Appoint or delegate to the Board the appointment of external auditors; and, v) Resolve matters in accordance with the Bylaws.

The purpose of the regulation to establish that shareholders must meet compulsorily within the first three (3) months of the year is so that they are informed of the Financial Statements and decide on the different issues that will be necessary for the continuity and growth of the company. The Annual Mandatory Meeting will be convened by the General Manager or Chairman of the Board of Directors, if applicable.

But what is the procedure that must be followed to convene an Annual Mandatory Meeting - JOA? In this regard, the General Companies Act states that such a Meeting must be convened no less than ten (10) days before the Meeting is held on the first call. In the event that the JOA is held in the second call, it must be held no less than three (3) or more than ten (10) days from the first call.

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Shareholders must meet within the first three months of the year so that they are informed of the Financial Statements and decide on the different issues that will be necessary for the continuity and growth of the company.

The Notice of Call to the JOA must be sent to all shareholders in accordance with the provisions of the Bylaws and the Law (email, publications, communications sent to the address); making sure that all shareholders are effectively informed of the completion of the JOA, whose call must contain at least the following:

Place, date and time of the meeting on the first call.
Place, date and time of the meeting on the second call.
JOA Schedule

It should be noted that the Statute of each company may establish greater formalities than those required by law for the conclusion of a JOA, and in each case those that are mandatory must be verified.

It should be noted that the Board may not deal with matters other than those found in the Agenda sent in the Notice of Call; likewise, the management of the company must have information related to the JOA agenda available to shareholders so that they can exercise their right to information.

It should be noted that the General Companies Act does not impose a sanction or fine for not holding the JOA within the first three (3) months; however, we must point out that the importance of the same being held within the deadline established by the Act is for shareholders to become aware of the company's economic and financial situation; and in this way they can adopt contingency measures, if necessary, for the proper functioning of the company and for the purpose of exercising good corporate governance.