Esta ley enmienda la Ley General de Corporaciones de 1995 para redefinir el término "miembro regular" de una Corporación Especial Propiedad de Empleados, establecer condiciones para su admisión y regular los adelantos de ganancias. Busca mejorar la competitividad de estas corporaciones permitiendo la participación de miembros a tiempo parcial que renuncien a un salario periódico a cambio de adelantos de ganancias.
(Approved January 8, 2004)
To amend paragraph (1), Subsection
(a) of Section 1603, and Subsection
(a) of Section 16.10 of Act No. 144 of August 10, 1995, as amended, known as "General Corporations Act of 1995", in order to redefine the term "regular member" of a Special Employee-Owned Corporation, to establish conditions to be admitted as such; to provide what pertains to advances of profits; and for other purposes.
Special Employee-Owned Corporations engaged in the production of goods and/or rendering of services are adversely affected in their capacity to compete with commercial or industrial enterprises that, through the years, have been able to subcontract the production of goods in countries where labor costs are significantly lower than in Puerto Rico. This allows them higher profit margins and, consequently, the opportunity to reduce the price of their goods and services below the cost of enterprises that lack access to those international markets of much lower labor costs.
In order to level competition conditions, some Puerto Rican enterprises deem it advisable to reduce their production costs not by merely reducing their cost in acquiring goods. They find that they may significantly reduce costs related to the hiring of their workers. The availability of people with vast technical and managerial experience in various lines of production of goods and services, willing to buy their membership certificates, work a minimum of 50 hours per month
waiving a periodic compensation for advance of profit, would grant employeeowned corporations significant advantages that would help them overcome the competitive disadvantages mentioned in the first paragraph of this statement.
For this reason, the Legislature of the Commonwealth of Puerto Rico has deemed it prudent to amend Act No. 144 of August 10, 1995, as amended, known as "General Corporations Act 1995", specifically its provisions on Special Employee-Owned Corporations, so as to best adjust it to the realities of the Puerto Rican work market and to the impossibility of some enterprises to cover operation costs and still be competitive.
It is believed that the large number of people who have significant skills in the various fields of the economy, who could be regular members of these corporations, waiving the advance on profits and investing in the same, shall be an incentive to these corporations and an innovative and creative way of facilitating internal financing of the same.
Section 1.- Paragraph (1), Subsection
(a) of Section 1603 of Act No. 144 of August 10, 1995, as amended, is hereby amended to read as follows: "Section 16.03.- Members; certificate of incorporation; contributions by members, rights and responsibility
(a) The certificate of incorporation shall establish the conditions required for admitting and removing its members, or it may provide that said conditions shall be consigned in the corporation's bylaws.
powers of the assembly of members to remove or dismiss a member as such. With respect to part-time employees, regular members shall be those who, in addition to complying with the provisions of this Chapter, have paid their membership fee in full, contribute with a minimum of twelve (12) weekly hours of direct work for the Corporation and waive the payment of a periodic salary for advanced profits. The Productivity Credit Notices corresponding to the work contributed to by these members shall be credited to the capital internal accounts, but they shall not be the object of advanced profits as in the case of regular members whose work relationship is full time. . . . . ."
Section 2.- Subsection
(a) of Section 16.10 of Act No. 144 of August 10, 1995, as amended, is hereby amended to read as follows: "Section 16.10.- Advance of profits
(a) Regular and periodic compensation distributed by the Special Employee-Owned Corporation to its full-time regular members for their work in the special corporation shall be deemed as an advance of profits and not as wages or salaries to the effects of labor legislation. Advance of profits shall not be distributed to part-time regular members.
Section 3.- Effectiveness This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 25 (H.B. 3793) of the $6^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend paragraph (1), Subsection
(a) of Section 1603, and Subsection
(a) of Section 16.10 of Act No. 144 of August 10, 1995, as amended, known as "General Corporations Act of 1995", in order to redefine the term "regular member" of a Special Employee-Owned Corporation, to establish conditions to be admitted as such; to provide what pertains to advances of profits; and for other purposes, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $11^{ ext {th }}$ of April of 2005.
Luis E. Fusté-Lacourt Director