When Do You Need a Legal Representative in Guatemala?

When incorporating a company in Guatemala, it is mandatory to appoint someone as a legal representative. That person will be a principal local point of contact, representing the company to Guatemalan authorities and taking responsibility for overseeing every aspect of the legal and regulatory processes related to launching the business.

Guatemala is one of the largest economies in Central America, with a promising outlook for foreign investment, which offers a host of investment and business growth opportunities. The first step to accessing those opportunities is appointing a reliable legal representative.

There are three types of legal representatives for companies operating in Guatemala:

In Guatemala, there are three types of legal representative.
A legal representative is in charge of representing the company before the Guatemalan authorities.
  • Administrator: The administrator is elected through the General Assembly of Members for a 3-year term, which can be renewed.
  • Manager: Managers can be appointed as the legal representative of a company as long as the legal assignment is granted by the General Assembly of Members. Additionally, the administrator can also appoint the manager as the legal representative of the organization, but only for certain activities.
  • Legal representation through a power of attorney: A power of attorney is granted to a person to act as the legal representative of an organization. The permitted actions and period for which the power is granted must be clearly stipulated. Note that the power of attorney must be issued by the legal representative or the General Assembly of Members.

A legal representative in Guatemala is in charge of the proper administration of a company and must ensure the company remains in full compliance with local regulations.

Some of the activities undertaken by a legal representative include:

  • Registering the company before public institutions
  • Signing contracts
  • Sale and purchase of goods
  • Making legal transactions
  • Carrying out administrative and commercial activities for the company
  • Hiring employees
  • Exercising judicial power

A legal representative in Guatemala can be any person of legal age, according to local legislation. The law does not discriminate between Guatemalan citizens or foreign nationals acting as the legal representative of an organization.

In Guatemala, nationals or foreigners can to act as legal representative of an organization.
The Commercial Code regulates the obligations of the legal representatives

Guatemala’s Commercial Code regulates the obligations of legal representatives. It states that a legal representative in Guatemala is responsible for any damages caused to the company, its shareholders, or creditors. In the case of more than one legal representative or administrator, the responsibility will be joint.

Foreign company branches are an existing legal entity in Guatemala. When implementing commercial activities, it is important to register the legal representative before engaging in local commercial activities.

It is extremely important to choose someone that adequately represents your organization and supports its goals and vision. You must also take into account that the legal representative weilds some decision-making and managerial power for the entity. Therefore, when appointing a legal representative in Guatemala, is important to:

  • Choose a trusted person.
  • Ensure that the candidate’s knowledge and skills match the requirements of your company.
  • Confirm that your legal representative is eligible for the position.

Choosing the right legal representative is an essential part when incorporating a company into the Guatemalan territory. At Biz Latin Hub, we have broad experience in company formation, legal and accounting services. With our full suite of market entry and back-office services, we are your single point of contact for the expansion of your business in Central America. Contact us now to receive personalized assistance and learn more about the types of legal entities in Guatemala.

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