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Company Law
Guatemala’s company law is generally sound and covers most internationally used business entities. Internal control of the administrators is lax. Minority shareholders are protected and the incorporation process is relatively efficient compared with the region. Problems lie in the formalistic view judges have about companies, in which under almost no circumstances can the legal personality be disregarded when it has been abused. Likewise, the presence of unregistered businesses is constantly mentioned as a major problem.
As a consequence, informal businesses are growing, the Government is incapable of taxing them, and businesses tend to remain small because of excessive registration obstacles and fear of heavy taxation.
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