2023 Laws of Puerto Rico › TITLE FOURTEEN - Private Corporations (§§ 1 — 4084) › Subtitle 5 - General Corporations Act (2009) › Chapter 224 - Directors and Officers (§§ 3561 — 3568) › § 3561 - Board of directors; powers; number; requirements; terms and quorum; committees; classes of directors; nonprofit corporations; actions in which the books are trusted, etc

(a) The business and affairs of every corporation organized in accordance with the provisions of this subtitle shall be governed by a board of directors, except as otherwise provided in this subtitle or in the certificate of incorporation. Whenever the certificate of incorporation contains any such provision, the powers and duties conferred or imposed upon the board of directors by this subtitle shall be exercised or performed by the person or persons designated in the certificate of incorporation.
(b) The board of directors shall consist of one (1) or more members, which shall be natural persons. The number of directors which shall compose the board of directors shall be fixed in the bylaws of the corporation, unless the certificate of incorporation fixes the number of directors, in which case, a change in the number of directors shall be made only by amending the certificate. The directors need not be stockholders of the corporation, unless so required by the certificate of incorporation or the bylaws. The certificate of incorporation or the bylaws may prescribe any other conditions to be a director. The directors shall continue to hold office until their successors are elected and qualified, or until they resign or are removed, whichever occurs first. The directors may resign at any time, provided that such resignation is informed to the corporation by written or electronic communication. A majority of the total number of directors shall constitute a quorum for the transaction of business, unless the certificate of incorporation or the bylaws require a greater number. Unless the certificate of incorporation provides otherwise, the bylaws may provide that a number less than a majority shall constitute a quorum, but said number shall never be less than one-third (⅓) of the total number of directors, except in such cases in which the board of directors composed of only one (1) director is authorized, in which case only one (1) director shall constitute a quorum. The vote of the majority of the directors present at a meeting in which there is a quorum shall be sufficient to approve the decisions of the board of directors, unless this subtitle or the certificate of incorporation or the bylaws require a greater proportion.
(c) Any corporation incorporated prior to the date of effectiveness of this act shall be subject to the provisions of clause (1) of this subsection, while any corporation incorporated on or after the date of effectiveness of this act shall be subject to clause (2) of this subsection:
(1) The board of directors may, by resolution adopted by a majority of the entire board, designate one (1) or more committees, each one of which shall be composed of one (1) or more directors of the corporation. The board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member in any meeting of the committee. The bylaws may provide that in the absence or disqualification of a member of the committee, the member or members present at any meeting and not disqualified from voting, whether or not these members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. To the extent authorized by the resolution of the board of directors, or the bylaws of the corporation, such committees shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, including the power to order the affixing of the corporate seal on all documents which so require. Notwithstanding the foregoing, such committees shall not have the power to: remove or elect officers; amend the certificate of incorporation (except that a committee may, to the extent authorized by a resolution of the board of directors providing for the issue of stock, as provided in § 3581 of this title, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of the assets of the corporation or the conversion or exchange of such shares for shares of any class or classes, or any other series of the same or another class of stock of the corporation, or fix the number of stock of any series or authorize the increase or decrease in the number of shares of any series); adopt an agreement of merger or consolidation under §§ 3731 and 3732 of this title; make recommendations to the stockholders regarding the sale, lease or exchange of all or a substantial portion of the property or assets of the corporation; approve resolutions to recommend a dissolution or a revocation of a dissolution, or to amend the bylaws of the corporation; and unless the resolution for the creation of a committee, the bylaws or the certificate of incorporation so provides, such committee shall not have the power to declare dividends, authorize the issuance of capital stock or adopt an agreement of merger under § 3733 of this title. Such committees shall have such name or names which are stated in the bylaws of the corporation, or the name or names which from time to time the board of directors shall determine by resolution.
(2) The board of directors may designate one (1) or more committees, each one of which shall be composed of one (1) or more directors of the corporation. The board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member in any meeting of the committee. The bylaws may provide that in the absence or disqualification of a member of the committee, the member or members present at any meeting and not disqualified from voting, whether these members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. To the extent authorized by the resolution of the board of directors, or the bylaws of the corporation, such committees shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, including the power to order the stamping of the corporate seal on all documents which so require it. Notwithstanding the foregoing, such committees shall not have the power to:
(A) Approve, adopt, or recommend affairs or actions to the stockholders (not related to the election or destitution of the directors) requiring to be submitted for the approval of the stockholders pursuant to the provisions of this chapter, or
(B) adopt, amend, or repeal the bylaws of the corporation. Such committees shall have such name or names which are stated in the bylaws of the corporation, or the name or names which from time to time the board of directors shall determine by resolution. Except when the certificate of incorporation, the bylaws or the resolution of the board of directors designating directors provides otherwise, the committee may create one (1) or more sub-committees, and may delegate to the sub-committee any and all of the powers and authorities of the committee. Each sub-committee shall consist of one (1) or more members of the committee.
(d) As provided in the certificate of incorporation or in the original bylaws or in a bylaw adopted by the vote of the stockholders, the directors of a corporation organized in accordance with this subtitle may be classified into one (1), two (2), or three (3) groups. The term of office of the directors in the first group shall expire at the next annual meeting; of the second group, one (1) year after said annual meeting; and of the third group, two (2) years after said meeting. At each annual election subsequent to this classification and election, the directors shall be elected for full terms, as the case may be, to succeed those whose terms expire. The certificate of incorporation may confer on the holders of any class or series of stock the right to elect one (1) or more directors who shall serve for the term and with such voting powers as may be stated in the certificate of incorporation. The conditions of office and the voting powers of the directors elected separately by the holders of any class or series of stock may be greater or lesser than those of any other director or class of director.
The certificate of incorporation may also confer on one (1) or more directors, whether or not they have been elected separately by the holders of any class or series of stock, voting powers greater or lesser than those of the other directors. If the certificate of incorporation provides that directors elected by the holders of any class or series of stock shall have more than one (1) vote per director in any issue, every reference in this subtitle to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of such directors.
(e) Unless prohibited or restricted by the certificate of incorporation or the bylaws of the corporation, any action needed or permitted in any meeting of the board of directors or of any committee designated thereby, in accordance with the powers conferred to it by this subsection, shall be authorized without need of a meeting, provided that all of the members of the board of directors or of the committee, as the case may be, give their consent in writing or by electronic communication to such action. Even though the consent by electronic communication does not entail physical transmission of paper, it shall establish a registry or record on the action and the decision taken, and shall be susceptible to automatic reproduction or transfer to paper format, if necessary. The electronic communication shall be reproduced in paper or shall be maintained in an electronic registry as determined by the board of directors or the committee, as the case may be. The validity, integrity, and reliability of the document to be transmitted must comply with the provisions of § 8703 of Title 3, part of the Puerto Rico Electronic Signature Act. In such case, the consent shall be recorded in the minutes of the meeting of the board of directors or of the committee, as the case may be.
(f) The board of directors may hold meetings within or outside the Commonwealth, unless otherwise provided by the certificate of incorporation or the bylaws. The meetings of the board of directors shall be notified to the directors pursuant to the provisions of the bylaws.
(g) The board of directors shall be empowered to fix the compensation of directors, unless otherwise provided by the certificate of incorporation or the bylaws.
(h) Unless otherwise provided by the certificate of incorporation or the bylaws, the members of the board of directors or any committee designated by the board of directors, in accordance with the powers conferred to it by this section, shall have the right to participate in any meeting or committee by a telephone conference, or other medium of communication, by which all of the persons who participate in the meeting may hear each other simultaneously. The participation of the board in the aforementioned manner shall constitute attendance to said meeting.
(i) A member of the board of directors, or a member of any committee designated by the board of directors shall, in discharging his/her duties, be fully protected and exempted from responsibility for relying in good faith on the records of the corporation and on the information, opinions, reports or statements presented to the corporation by any of the officers or employees of the corporation, or committees of the board of directors, or by any other person as to issues which the member reasonably believes are within the scope of the professional or expert competence of such person who has been selected reasonably careful by or on behalf of the corporation.
(j) The certificate of incorporation of any corporation organized pursuant to the provisions of this subtitle which is not authorized to issue capital stock may provide that less than one-third (⅓) of the members of the governing body shall constitute a quorum or may provide that the business and affairs of the corporation shall be managed in a manner different from that provided by this section. Except as provided in the certificate of incorporation, this section shall apply to such corporation, and when so applied, all reference to the board of directors, the members thereof, and the stockholders shall be construed as reference to the governing body of the corporation, the members thereof, and the members of the corporation, respectively.
(k) Any director or the entire board of directors may be removed, with or without just cause, by the majority stockholders entitled to vote to elect directors, except:
(1) In case of a corporation whose board of directors is classified in groups, in accordance to subsection (d) of this section, in which case the stockholders may remove the director or directors only for just cause, unless otherwise provided by the certificate of incorporation, or
(2) in case of a corporation whose certificate of incorporation authorizes cumulative voting, if less than the entire board of directors is to be constituted, no director shall be removed without just cause when the votes against the removal would be sufficient to elect him/her had voting been cumulative to elect all of the directors or, if there be classes or groups of directors, to elect him/her to the class or group of directors to which he/she belongs.
In those cases where the certificate of incorporation grants to the holders of any class or series of stock the power to elect one (1) director or more, the provisions of this subsection shall apply, with respect to the removal without just cause of a director or directors so elected, to the vote of the holders of outstanding shares of that class or series and not to the vote of the total outstanding shares.
History —Dec. 16, 2009, No. 164, § 4.01.