The Public Registry and Notarial Law ("LRPN") was published in Official Gazette No. 37.324, dated November 14, 2001, as Decree with the Status and Force of Law No. 1.554,. This Decree Law governs the organization, operation, administration and powers of Registry Offices and Notaries. The new LRPN replaces and complements the regulatory texts governing the matter, namely the Public Registry Law and the Notaries' Regulations.
I. Registry System
In essence, the new Venezuelan registry system creates three fundamental Registries and introduces three methods to improve efficiency. The registries are the Real Estate Registry, the Commercial Registry and the Civil Registry.
(i) Real Estate Registry
The purpose of the Real Estate Registry is to register and record the legal acts and procedures relating to ownership and other real property rights affecting real property. The Law expressly establishes that the provisions of the legal framework which require registration with the Public Registry of documents evidencing or implementing legal transactions relating to real property rights shall remain fully effective. The relevant Article further contains an extensive list of documents that must be registered with the Real Estate Registry, but is largely redundant since most of the documents therein listed already required registration with the Public Registry before the passing of the LRPN. An exception is conditional real property purchase agreements (promises or letters of intent), that did not previously, but do now, require registration.
Among the most relevant innovations contained in the chapter of the Law concerned with the Real Estate Registry, are:
provision for the coordination of work between the Municipal Cadastre Offices and the Real Estate Registry, as they will serve as the source of information of such Registriesste; and
provision that in the documents registered subsequent to an earlier document which referred to the same real property, it is not necessary to repeat the details of the location, measurements and boundaries of the same or its cadastre, unless any modification in respect thereof has occurred.
(ii) Commercial Registry
The purpose of the Commercial Registry is to register commercial entities, whether individuals or associations, their representatives or agents, whether they be public or private companies, domestic or foreign, as well as all agreements and other transactions requiring registration under the law. Additionally, Commercial Registries will continue to conduct the legalization of commercial books, the deposit and publication of accounting statements and the centralization and publication of information.
In terms of organization, this will be conducted for Commercial Registries through one Central Registry and Territorial Commercial Registries. Such organization is delegated to the respective Regulations.
The Decree-Law establishes new powers of control for the Commercial Registrar over limited liability companies and corporations, based on a provision contained in Article 200 of the Commercial Code. The powers envisaged include the ability to reject the registration of companies with insufficient capital, applying reasonability criteria associated with their corporate purpose. This creates legal uncertainty by not defining "insufficient capital", leaving the determination of...